DISH to bring $2 billion of convertibles; NextEra also on tap; Cobalt paper declines

By Stephanie N. Rotondo

Seattle, Aug. 2 – The convertible new issue calendar was building up on Tuesday, with offerings announced by DISH Network Corp. and NextEra Energy Inc.

DISH launched a $2 billion offering of 10-year notes.

Initial price talk is 3.125% to 3.625%, a market source reported. The initial conversion premium is expected to be 30% to 35%.

A trader saw the issue at par bid, 100.5 offered in the gray market.

As for the stock, it took a hefty hit as S&P and Moody’s Investors Service expressed concerns about how the deal would impact the bottom line.

The equity closed down $4.29, or 8.02%, at $49.19.

NextEra meantime announced a $1.5 billion offering of mandatory convertible equity units.

The units will have a par value of $50. Each unit will consist of a contract to purchase NextEra Energy common stock and a 5% beneficial ownership interest in a NextEra Energy Capital Holdings Inc. debenture due Sept. 1, 2021.

Goldman Sachs & Co., Credit Suisse Securities (USA) LLC and Mizuho Securities are the joint bookrunners.

Away from new issues, a trader said Cobalt International Energy Inc. “took every bit of bad news they had and threw them out this morning with earnings.”

In addition to posting a wider loss for the quarter, Cobalt also noted that a sale of its Angola blocks had hit a snag. As a result, the convertible bonds dipped, as the equity tanked.

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