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Morning Commentary: New York Times-based mandatories price; Cleveland-Cliffs, General Cable strong
By Abigail W. Adams
Portland, Me., Dec. 8 – 2017 Mandatory Exchangeable Trust priced $250 million in three year mandatory convertible securities tied to New York Times Co. stock Thursday evening with a coupon of 5.1875% and an initial conversion premium of 20%.
Pricing came within talk for a coupon of 5% to 5.5% and an initial conversion premium of 17.5% to 22.5%, according to a market source.
Barclays is the sole bookrunner for the Rule 144A offering, which carries a greenshoe of $37.5 million.
Five banks with a stake in the New York Times formed 2017 Mandatory Exchangeable Trust. Banco Inbursa, SA, Institucion de Banca Multiple, Grupo Financiero Inbursa, Inversora Carso, SA de CV and Control Empresarial de Capitales, SA de CV are the shareholder banks.
The deal was “well oversubscribed,” a market source said. “There was a lot of demand.”
The trust’s three-year deal is the first mandatory convertible security since Crown Castle International Corp. priced $1.65 billion in July.
In the existing convertible space, Cleveland-Cliffs Inc.’s recently issued 1.5% convertible notes due 2025 and General Cable Corp.’s 4.5% convertible notes due 2029 remained in focus with both gaining some strength.
Cleveland-Cliffs 1.5% notes were back to 101 in early trades for the first time since they first broke onto the secondary market Wednesday.
The notes weakened slightly on Thursday, at times dipping below par, but ended the day at 100.665, according to Trace data.
Cleveland-Cliffs stock was also up 1.96% in early trades at $6.25.
General Cable broke 106 in early trades after solidifying around 105 for most of the week. The convertible notes jumped 8 points on Monday when news of the company’s acquisition by Prysmian SpA was announced.
General Cable stock was also up slightly Friday at $29.73, an increase of 0.08%.
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