Morning Commentary: Hannon Armstrong deal on tap; Apollo Commercial details new 4.75% issue

By Stephanie N. Rotondo

Seattle, Aug. 16 – The convertible debt primary market continued to be in focus early Wednesday, as investors waited for a $135 million offering of five-year convertible senior notes from Hannon Armstrong Sustainable Infrastructure Capital Inc.

The deal was announced after Tuesday’s close, with pricing expected after Wednesday’s bell. An investor call is scheduled for 11 a.m. ET.

Price talk in the new issue is for a 3.625% to 4.125% yield and an initial conversion premium of 20% to 25%.

Deutsche Bank Securities Inc., BofA Merrill Lynch and J.P. Morgan Securities LLC are the joint bookrunners.

Ahead of pricing, the company’s stock (NYSE: HASI) was slipping a little, falling 66 cents to $25.45.

Meanwhile, Apollo Commercial Real Estate Finance Inc. gave new details on its $200 million sale of 4.75% convertible senior notes due 2022 on Wednesday.

The issue priced late Tuesday, coming with an initial conversion premium of 10% and at the discounted price of 99% of par.

Morgan Stanley & Co. LLC, BofA Merrill Lynch, Citigroup Global Markets Inc. and JPMorgan are the joint bookrunners.

The initial conversion rate is 50.2260 shares per each $1,000 of notes, equal to an initial conversion price of $19.91 a share.

In the wake of the new deal, Apollo’s equity (NYSE: ARI) was up 2 cents at $18.12.

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