Ares Capital’s new deal straddles par; Liberty firms; Horizon Global, Virtus deals coming up

By Stephanie N. Rotondo

Seattle, Jan. 25 – A convertible bond trader said there was less activity in Ares Capital Corp.’s new $350 million issue of 3.75% convertible notes due 2022 in early midweek dealings, after topping the charts on Tuesday.

Additionally, he said the paper had come in a bit, trading in a 99.875 to 100.25 context.

The underlying stock was up 3 cents at $17.01.

The deal came Tuesday with a 15% initial conversion premium. Pricing overall was at the cheap end of the 3.25% to 3.75% yield talk, with a conversion premium of 15% to 20%.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, BMO Capital Markets and Goldman Sachs & Co. ran the books.

The notes are convertible at a rate of 51.5756 shares per each $1,000 of notes, equal to $19.39 per share.

Proceeds will be used to repay debt.

Meanwhile, Liberty Media Corp.’s 1% cash-convertible notes due 2023 were slightly better intraday, according to a trader.

The trader saw the convertibles at 103.6, which compared to levels around 102.75 to 102.875 earlier in the day.

The underlying series C stock was up 53 cents, or 1.83%, at $29.42.

Liberty sold $400 million of the notes on Friday. On the following Tuesday, the company said its $50 million greenshoe had been fully exercised, bringing the total amount outstanding to $450 million.

The size was increased from an originally announced $350 million, and the terms came at the rich end of talk for a yield of 1% to 1.5% and an initial conversion premium of 27.5% to 32.5%.

The greenshoe was reduced from $52.5 million.

Looking ahead, Horizon Global Corp. is expected to price a $100 million offering of convertible senior notes due 2022 after the close on Thursday.

A trader commented that the company’s equity was trading below the $20.00 mark on Wednesday, marking the first time the stock has been under that threshold since August.

The shares were off $2.02, or 9.67%, at $18.86.

Price talk on the convertibles sale is for a 2.75% to 3.25% yield and an initial conversion premium of 27.5% to 32.5%.

JPMorgan, Wells Fargo Securities LLC, BofA Merrill Lynch and BMO Capital Markets are running the books.

Also in the pipeline was a deal from Virtus Investment Partners Inc. The company said late Wednesday that it was selling $100 million of series D mandatory convertible preferred stock.

The dividend is talked at 7% to 7.5%, with an initial conversion premium of 17.5% to 22.5%.

Barclays, JPMorgan, BofA Merrill Lynch and Morgan Stanley & Co. LLC are the joint bookrunners.

Shares of the company’s common stock were up 65 cents at $125.65.

Mentioned in this article:

Ares Capital Corp. Nasdaq: ARCC

Horizon Global Corp. NYSE: HZN

Liberty Media Corp. Nasdaq: LMCK

Virtus Investment Partners Inc. Nasdaq: VRTS

© 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.