Morning Commentary: Cheesecake Factory convertible notes trade up on debut

By Abigail W. Adams

Portland, Me., June 11 – New paper continued to dominate activity in the convertibles secondary space on Friday with the last new deal of the week making its aftermarket debut.

The Cheesecake Factory Inc. sold $300 million of five-year convertible notes after the market close on Thursday at par with a coupon of 0.375% and an initial conversion premium of 40%.

In a throwback to the heyday of primary market activity, demand for the notes drove pricing tighter than initial talk.

The notes were initially talked with a coupon of 0.5% to 1% and an initial conversion premium of 32.5% to 37.5%, according to a market source.

Concurrently, the company priced a secondary offering of $175 million, or 3,125,000 shares, of common stock at $56.00. The secondary offering carries a greenshoe of $26.25 million.

The new paper was in focus in the secondary space.

The notes opened the day at par and steadily climbed as the session progressed.

The 0.375% notes were changing hands at 103 on an outright basis a little more than one hour after the opening bell.

Cheesecake Factory’s stock was changing hands at $57.99, an increase of 1.99%, shortly before 11 a.m. ET.

© 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.