Morning Commentary: Jazz’s recent deal pushes above issue price; Red Hat, Palo Alto active

By Stephanie N. Rotondo

Seattle, Aug. 22 – Convertible bond traders were again lamenting a lack of liquidity in early Tuesday trading.

“This week is going to get worse and worse and next week will be another convertible eclipse,” said one trader.

Though the second half of August tends to be on the slower side, the muted volume came after about two weeks of pretty steady new issuance, as well as earnings news that helped to push names around.

As for Tuesday’s dealings, Jazz Pharmaceuticals plc’s $500 million of 1.5% convertible notes due 2024 were deemed half a point higher at 97.5.

The company’s stock (Nasdaq: JAZZ) was also trending up, adding $2.66, or 1.87%, to $145.28 by mid-morning.

The Rule 144A deal priced on Friday with an initial conversion premium of 50%. The issue also came discounted at 97.

Morgan Stanley & Co. LLC was the active bookrunner.

Meanwhile, Red Hat Inc.’s 0.25% convertible notes due 2019 were unchanged to a shade lower, trading around 145.

Red Hat stock (NYSE: RHT) was up 55 cents at $103.20.

And, Palo Alto Networks Inc.’s 0% convertible notes due 2019 were up about 1.5 points at mid-morning, trading near 130.5.

The underlying shares (NYSE: PANW) were also better, rising $1.45, or 1.11%, to $132.42.

There was no fresh news out on Red Hat or Palo Alto to act as a catalyst.

© 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.