Morning Commentary: Resource Capital plans new issue; BioMarin’s recent deal remains in play

By Stephanie N. Rotondo

Seattle, Aug. 10 – Yet another new issue was added to the convertible bond market calendar early Thursday.

Resource Capital Corp. announced plans to sell $125 million of convertible senior notes due 2022 via Credit Suisse Securities (USA) LLC.

The debt is non-callable, convertible prior to maturity and putable in the event of a fundamental change.

Ahead of pricing, the company’s stock (NYSE: RSO) was not faring well, falling 43 cents, or 3.91%, to $10.58.

The New York-based real estate investment trust intends to use proceeds from the offering to repurchase a portion of its 6% convertible notes due 2018 and its 8% convertible notes due 2020.

As for the week’s other new issues, BioMarin Pharmaceutical Inc.’s 0.599% convertible notes due – a $450 million deal that priced late Monday with a 40% initial conversion premium – remained active.

However, the bonds – which priced at a discount – were tracking the underlying equity lower.

A trader saw the convertibles trading with a 96 handle in early dealings. That compared to levels in a 97.25 to 97.75 range previously.

The deal came at 98.

As for the stock, it was off $1.60, or 1.88%, at $83.56 at mid-morning.

BofA Merrill Lynch led the deal, with J.P. Morgan Securities LLC and Goldman Sachs & Co. acting as joint bookrunners.

The terms of the deal were deemed a bit odd, given the strange coupon, the fact that it priced at a discount and that it came with an initial conversion premium of 40%. After Tuesday’s session, one trader opined that it was a bought deal, thus the awkward terms.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.