Morning Commentary: Liberty Latin America, Uniti hit the market; Qudian on tap

By Abigail W. Adams

Portland, Me., June 26 – While new deal activity continues to lag 2018, the convertibles primary market stood poised to close out the second quarter on strong footing.

Two deals totaling $650 million priced prior to the market open on Wednesday and two more deals totaling $500 million were set to price after the market close.

Uniti Group Inc. priced $300 million of five-year exchangeable notes and Liberty Latin America Ltd. priced $350 million of five-year convertible notes prior to the market open on Wednesday.

The new paper was performing well on its market debut, sources said.

While previously believed to be pricing after the market close on Tuesday, Change Healthcare Inc.’s $250 million offering of three-year par of $50 tangible equity units will price after the market close on Wednesday.

Qudian Inc. is also slated to price its $250 million offering of seven-year convertible notes after the market close.

Uniti trades up

Uniti Group priced $300 million of five-year exchangeable notes prior to the market open on Wednesday at par with a coupon of 4% and an initial exchange premium of 32.5%.

Pricing came at the rich end of talk for a coupon of 4% to 4.5% and an initial exchange premium of 27.5% to 32.5%.

The new paper was performing well in the secondary space.

The 4% notes traded up to 101.75 bid, 102 offered with stock down early in the session.

They were expanded up to 2 points dollar-neutral, a market source said.

Uniti stock traded down to $9.20, a decrease of 1.92%, shortly before 11 a.m. ET.

Liberty wall-crossed

Liberty Latin America priced $350 million of five-year convertible notes prior to the market open on Wednesday with a coupon of 2% and an initial conversion premium of 22.5%.

Pricing came at the cheap end of talk for a coupon of 1.5% to 2% and an initial conversion premium of 22.5% to 27.5%.

“It was decently priced for an overnight,” a market source said.

The deal, which priced shortly after it was announced, was heard to be wall-crossed with most of the issue spoken for before it hit the secondary space.

It was holding up well as stock took a hit, a market source said.

The new notes were largely hovering at par early in the session although there were some prints as low as 99.625.

The notes are convertible into Liberty Latin America’s class C common stock.

The class C stock traded down to $17.05, a decrease of 6.06%, shortly before 11 a.m. ET.

Qudian on tap

Qudian is the latest China-based company to come forward with a convertible notes offering.

The Xiamen, China-based online small consumer credit provider plans to price $250 million of seven-year convertible notes after the market close on Wednesday with price talk for a coupon of 0.75% to 1.25% and an initial conversion premium of 25% to 30%, according to a market source.

© 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.