Morning Commentary: AOL flat to better on hedge; planned Priceline pressures existing 1% paper

By Rebecca Melvin

New York, Aug. 14 – AOL Inc.’s newly priced 0.75% convertibles popped out of the chute early Thursday and were last flattish to a bit better on a hedged basis after the New York-based digital company priced an upsized $330 million of the five-year senior notes toward the rich end of coupon talk and at the midpoint of premium talk.

The AOL deal, which was initially talked at $300 million in size, traded at 103 bid, 104 offered at the market open, a New York-based trader said.

Later the new paper was 102.75, according to Trace data, with the underlying shares up about $1.05, or 2.5%, at $43.51.

Also in focus on Thursday was the Priceline Group Inc.’s planned offering of up to $1 billion of seven-year convertible senior notes, which was seen pricing after the market close.

The new deal was talked at a 0.75% to 0.9% coupon and a 60% premium and seemed to weigh on Priceline’s existing convertibles.

Priceline’s 1% convertibles due 2018 were seen at 146.77, which was down nearly a point, according to Trace data.

Priceline’s 0.35% convertibles due 2020 traded at 120 early Thursday, a syndicate source said.

The Priceline 1.25% convertibles due 2015 were not heard in trade.

On Monday, the Norwalk, Conn.-based online travel company reported revenue that was in line with expectations for its latest quarter. But it guided current-quarter earnings below estimates.

© 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.