American Electric Power trades up; Euronet continues to dominate; SSR Mining improves

By Abigail W. Adams

Portland, Me., March 15 – The convertibles secondary market opened with $700 million in new paper entering the space, capping off what has been another high-volume week for new deal activity.

With $1.4 billion pricing over three deals over the past week, new deal volume in 2019 has now surpassed new deal volume in 2018, which was a record year for convertible issuance.

New deal volume stands at $9.75 billion year to date in 2019 compared to $9.64 billion year to date in 2018, according to an analysis of Prospect News data.

The new deals to price over the past week remained in focus in the secondary space.

American Electric Power Co. Inc. priced $700 million, or 14 million units, of $50-par three-year equity units after the market close on Thursday. The units were trading up in high-volume activity.

Euronet Worldwide Inc.’s 0.75% convertible notes due 2049 remained the most actively traded convertible bonds in the secondary space with the notes continuing their large dollar-neutral expansion.

SSR Mining Inc.’s 2.5% convertible notes due 2039 also continued to improve on a dollar-neutral basis on Friday.

American Electric trades up

American Electric priced $700 million, or 14 million units, of $50-par three-year equity units after the market close on Thursday with a dividend of 6.125% and an initial conversion premium of 20%.

Pricing came at the rich end of talk for a dividend 6.125% to 6.625% and at the midpoint of talk for an initial conversion premium of 17.5% to 22.5%.

The equity units consist of a contract to purchase common stock and a 1/20 interest in a $1,000-par 3.4% junior subordinated debenture due March 15, 2024.

The units were “trading up a storm” on Friday, a market source said.

They were quoted at $50.25 to $50.375 bid and were changing hands between $50.25 to $50.50 early in the session, sources said.

They were seen at $50.50 versus a stock price of $83.97 later in the afternoon. The units saw a slight dollar-neutral expansion, a source said.

With a rating of Baa2 from Moody’s Investors Service and BBB from S&P Global Ratings, the units were in hot demand.

More than 10 million of the units were in play by mid-afternoon.

While in demand, one source noted the units priced while American Electric stock was near its 52-week high and questioned how much further the stock would run.

American Electric’s stock broke out to a new 52-week high on Friday, trading as high as $84.27 before closing the day at $83.81, an increase of 1%.

Euronet richens

Euronet Worldwide’s 0.75% convertible notes due 2049 remained the most actively traded convertible bonds in the secondary space with $70 million on the tape by late afternoon Friday.

The notes were changing hands around 104.5 with stock off for most of the session.

The notes were rich from the get go yet continued to trade up in the secondary space.

“Those were a blowout,” a source said.

They gained another 0.25 point dollar-neutral, adding to the 3-point expansion seen on their market debut on Thursday, sources said.

Euronet stock traded as low as $137.76 before closing the day at $138.15, a decrease of 1.65%.

There was good trading back and forth with swap sellers and outright buyers, a market source said.

SSR improves

SSR Mining’s 2.5% convertible notes due 2039 also remained active their second day in the secondary space.

The notes were continuing to improve on an outright and dollar-neutral basis.

The notes were changing hands at 100.5 in the mid-afternoon.

They gained another 0.25 point dollar-neutral after a 2 point dollar-neutral expansion on their market debut Thursday, sources said.

More than $10 million of the bonds were in play by the late afternoon.

SSR Mining stock closed Friday at $13.05, an increase of 0.38%.

Mentioned in this article:

American Electric Power Co. Inc. NYSE: AEP

Euronet Worldwide Inc. Nasdaq: EEFT

SSR Mining Inc. Nasdaq: SSRM

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