Morning Commentary: CryoLife’s new convertible notes price cheap, trade up on debut

By Abigail W. Adams

Portland, Me., June 19 – Primary activity in the convertibles market was slow over the past week with three deals totaling $665 million pricing.

CryoLife Inc. rounded out the new deal activity and priced its $100 million of five-year convertible notes after the market close on Thursday.

While the primary market is not expected to be as active as it has been in the upcoming week, there are deals in the pipeline, a market source said.

Meanwhile, the convertibles secondary space was firm on Friday with equities poised to close out a volatile week with gains.

CryoLife’s new convertible notes were trading up on both an outright and dollar-neutral basis.

CryoLife comes cheap

CryoLife priced $100 million of five-year convertible notes after the market close on Thursday at par at the cheap end of talk with a coupon of 4.25% and an initial conversion premium of 35%.

Price talk was for a coupon of 3.75% to 4.25% and an initial conversion premium of 35% to 40%, according to a market source.

The new paper was trading up on both an outright and dollar-neutral, or hedged, basis.

The 4.25% notes traded up to 102.5 early in the session. They expanded about 0.5 point dollar-neutral, a source said.

CryoLife stock rose to $19.22, an increase of 10.59%, shortly before 11 a.m. ET.

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