Morning Commentary: Convertibles heavy as equities sell off; new Granite Point quiet

By Rebecca Melvin

New York, Oct. 10 – U.S. convertibles were heavy with a sell-off in equities in the early going on Wednesday, and some of the activity among hedged players was to lighten up on deltas, according to a New York-based market source.

The market had two new deals in the market that are on the small side, and they didn’t seem to be a focus of activity.

Granite Point Mortgage Trust Inc. priced $125 million of five-year convertible notes at par after the market close on Tuesday to yield 6.375% with an initial conversion premium of 10%.

In addition, Karyopharm Therapeutics Inc. was in the market with a $150 million offering of seven-year convertible senior notes that were being talked with a coupon of 2.5% to 3% and an initial conversion premium of 25% to 30%.

Karyopharm shares were selling off ahead of the pricing of the convertible deal, which was expected after the market close. Karyopharm shares were last down about $2.00, or 13%, at $13.50.

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