Morning Commentary: New U.S. Steel trades around par; Crown Castle preferreds active

By Rebecca Melvin

New York, Oct. 17 – United States Steel Corp.’s newly priced 5% convertibles traded right around par in the early going on Thursday after the Pittsburgh-based integrated steelmaker priced $300 million of the seven-year convertibles beyond the cheap end of talk for the coupon and at the cheap end for the premium.

The new U.S. Steel bond priced with a 27.5% premium to the closing share price on Wednesday. That compares to talk for a 4% to 4.5% coupon and 27.5% to 32.5% premium.

The new issue was quoted around 100 versus an underlying share price of $10.48, which was called unchanged on a dollar neutral basis, moving on an 80% delta, a New York-based market source said.

The stock was last at $10.53, which was up 3 cents, or 0.3%, on the day.

Proceeds of the new issue will be used for general corporate purposes, including strategic investments and capital expenditures.

Among mandatory deals, Crown Castle International Corp.’s 6.875% mandatory preferreds were active with the common stock trading up after the communications infrastructure company reported positive earnings that beat estimates.

The $1.65 billion Crown Castle mandatory, which priced in 2017, was trading up $27.73, or 2.3%, to $1,242.79. Crown Castle’s common was up $4.82, or 3.6%, at $139.52.

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