Morning Commentary: Hannon Armstrong in focus, trades up outright but flat on hedge

By Abigail W. Adams

Portland, Me., April 8 – It was a relatively quiet morning in the convertibles secondary space on Friday with the exception of one name – Hannon Armstrong Sustainable Infrastructure Capital Inc.

Hannon Armstrong priced $200 million of 0% green exchangeable notes due 2025 with a redemption price of 110.15 for an accretion rate of 3.25% and an initial conversion premium of 32.5%.

Pricing came in line with widened talk for a redemption price at maturity of 110.15 for an accretion rate of 3.25% and at the rich end of talk for an initial conversion premium of 30% to 32.5%, according to a market source.

Initial price talk was for a redemption price at maturity of 107.1 to 108.7, for a yield of 2.25% to 2.75% and an initial conversion premium of 35% to 40%.

The new paper dominated activity in the secondary space accounting for $25 million of the $70 million in reported volume about one hour into the session.

The notes traded in a range of 99.875 to 100.5.

They were marked at 100 bid, 100.375 offered versus a stock price of $42.67 shortly before 11 a.m. ET.

The notes were flat on swap, a source said.

They were moving on a theoretical delta of 54%.

Hannon Armstrong stock was changing hands at $42.47, a decrease of 0.48%, 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.