Morning Commentary: New j2 Global edges par in active trade; planned Sea looks cheap

By Rebecca Melvin

New York, Nov. 13 – j2 Global Inc.’s newly priced 1.75% convertibles were trading around 100.875 early Wednesday with the shares up about 0.5% after the Los Angeles-based internet services provider priced $500 million of the seven-year notes at the midpoint of price talk, according to market sources.

The j2 Global paper was trading actively with more than $120 million of the bonds having changed hands by late morning, according to Trace data.

j2’s existing 3.25% convertibles due 2029 were trading off 0.4 point at 145.94 in light volume.

Proceeds of the new non-callable for life notes will be used to pay off all amounts outstanding under an existing senior secured credit facility of j2 Global’s wholly owned subsidiary, j2 Cloud Services, LLC. The remainder of proceeds are earmarked for general corporate purposes, which may include acquisitions, although j2 Global does not have any agreements or commitments for any material acquisitions or investments at this time.

Also in focus on Wednesday was Sea Ltd.’s $1 billion of five-year convertible notes, which were expected to price after the market close.

The Sea deal was seen a couple of points cheap at the midpoint of price talk, using a credit spread of 300 basis points over Libor and 40% vol., according to a New York-based trader.

The Sea deal, which was announced late Tuesday, was being talked to yield 0.75% to 1.25% and with a 40% to 45% initial conversion premium.

Sea shares were down about 1% at $36.42 in trading on the New York Stock Exchange.

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