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Morning Commentary: Marriott Vacations convertibles price, gain on debut; fuboTV on tap
By Abigail W. Adams
Portland, Me., Jan. 28 – The convertibles primary market continued to roll out offerings as equity markets recovered from one of the worst days in months.
fuboTV plans to price $350 million of five-year convertible notes after the market close on Thursday with price talk for a coupon of 3% to 3.5% and an initial conversion premium of 42.5% to 47.5%, according to a market source.
The deal was heard to be in the market with assumptions of 650 basis points over Libor and a 45% vol., a source said.
The deal looked 3.8 points cheap, a source said.
However, the name had a tremendous amount of short interest.
“I’m not sure how that’s going to play out with the Reddit army,” a source said.
After spiking as high as $49.88 early in the session, fuboTV stock traded down to $46.14, a decrease of 0.9%, shortly before 11 a.m. ET.
Meanwhile, Marriott Vacations Worldwide Corp.’s newly priced 0% convertible notes due 2026 were putting in a strong performance in their aftermarket debut.
Marriott priced $500 million of five-year convertible notes after the market close on Wednesday at par with a coupon of 0% and an initial conversion premium of 40%.
Despite the bloodletting in equities on Wednesday, pricing came at the rich end of initial talk for a coupon of 0% to 0.5% and richer than initial talk for an initial conversion premium of 32.5% to 37.5%, according to a market source.
The new paper was trading up on an outright basis.
The convertibles traded as high as 102.25 bid early in the session.
The notes were changing hands at 101.5 early in the session with stock up a little over 2%.
Marriott’s stock was $124.89, an increase of 2.24%, shortly before 11 a.m. ET.
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