Morning Commentary: Aerojet comes upsized, pushes above par; week’s other new deals still in focus

By Stephanie N. Rotondo

Seattle, Dec. 9 – It continued to be all about new issues in the convertible bond market early Friday.

Aerojet Rocketdyne Holdings Inc. announced that it sold $260 million of 2.25% convertible senior notes due 2023, with a conversion premium of 36.8%.

Price talk was for a yield of 1.875% to 2.375% and an initial conversion premium of 27.5% to 32.5%. The deal was upsized from $200 million.

In early dealings, the new deal jumped to a 102.75 to 103 context, according to a trader.

“The stock was up a little bit this morning,” the trader noted.

Though that was true, by mid-morning the underlying equity (NYSE: AJRD) was off a shade.

From Wednesday’s business, Ensco plc’s $750 million offering of 3% exchangeable senior notes due 2024 was “the other one that’s trading a lot,” the trader said.

He called the issue up “like 5 points” at 107.75 bid, 108.25 offered.

As for Teradyne Inc.’s $400 million of 1.25% senior convertible notes due 2023 – another deal from Wednesday – they were seen at 105.5 bid, 106 offered. Zillow Group Inc.’s 2% convertible senior notes due 2021 – also from the midweek session – were pegged at 102.5 bid, 103 offered.

Away from new issues, LinkedIn Corp.’s 0.5% convertible notes due 2019 were “active, but there’s not actual movement,” according to a trader.

The trader saw the issue trading with a 99 handle.

LinkedIn said Thursday that it would repurchase the notes on Dec. 28 due to a fundamental change.

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