Morning Commentary: DISH to tap market, existing paper retreats; Finisar sees earnings miss

By Stephanie N. Rotondo

Seattle, March 10 – DISH Network Corp.’s 3.375% convertible notes due 2026 were dominating early trading on Friday as investors responded to news of a new deal from the Englewood, Colo.-based satellite TV provider.

At mid-morning, a trader said volume in the 3.375% convertibles accounted for $28 million of the total $90 million in bonds traded.

He pegged the securities in a 120 to 120.25 context. Another market source agreed with that level, calling the issue down about a deuce.

As for the underlying equity (Nasdaq: DISH), it was also faltering.

The stock was off $1.06, or 1.67%, at $62.48 in early trading.

DISH said it planned to sell $1 billion of seven-year convertible notes via a Section 4(a)(2) private placement.

Price talk is for a 1.875% to 2.375% yield and an initial conversion premium of 30% to 35%.

Deutsche Bank Securities Inc. is running the books.

Meanwhile, Finisar Corp.’s 0.5% convertible notes due 2036 were seeing some action in the wake of the company’s third-quarter earnings results late Thursday.

A trader said the debt was slightly higher in a 99.5 to 99.75 context.

The equity (Nasdaq: FNSR), however, was getting slammed, dropping nearly 20% by mid-morning.

For the quarter, Finisar reported net income of $46.4 million, or 40 cents per share. On an adjusted basis, EPS was 59 cents per share.

Revenue came to $380.6 million.

Analysts polled by Zacks Investment Research had forecast adjusted EPS of 61 cents on revenue of $389.1 million.

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