Morning Commentary: Western Digital active on earnings; AXA offering gets ‘positive reception’

By Abigail W. Adams

Portland, Me., April 27 – While the convertibles space was relatively quiet early in Friday’s session, Western Digital Corp.’s 1.5% convertible notes due 2024 returned to focus as a volume leader.

The 1.5% notes were up slightly on an outright basis to trade just north of 108 with the stock down $4 early in the session.

Western Digital reported third-quarter earnings after the market close on Thursday, which beat analyst expectations by a wide margin.

The San Jose, Calif.-based computer data storage company reported earnings per share of $3.63 on income of $1.1 billion. The consensus estimate was for earnings per share of $3.31.

While Western Digital stock surged in after-hours trading, it was down more than 6% in high-volume trading soon after the opening bell on Friday.

More than 3 million shares traded less than 1.5 hours into the session.

The market will not see AXA SA’s three-year bonds mandatorily exchangeable for AXA Equitable Holdings, Inc. until May 9. However, the deal looks good, a market source said.

“At first blush, it’s a pretty positive reception,” a market source said. The deal has garnered interest from both hedge and outright accounts, the source said.

AXA plans to price $750 million three-year bonds mandatorily exchangeable for AXA Equitable Holdings stock on May 9 concurrently with an initial public offering of AXA Equitable stock.

Price talk is for a coupon of 6.75% to 7.25% and an initial exchange premium of 17.5% to 22.5%.

AXA SA will sell 137.25 million shares of common stock with the price expected to be between $24.00 and $27.00.

“The pricing on it is fine, and there may be a little IPO pop,” the source said.

© 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.