Air Transport, IAC/InterActive deals on tap; Marriott Vacations trades actively, better

By Stephanie N. Rotondo

Seattle, Sept. 25 – Two new convertible bond issues were added to the primary calendar on Monday.

Early in the day, Air Transport Services Group Inc. said it was selling $200 million of convertible senior notes due 2024 via a Rule 144A offering.

Price talk is for a 1.25% to 1.75% yield and an initial conversion premium of 32.5% to 37.5%, according to a market source.

Goldman Sachs & Co. and SunTrust Robinson Humphrey Inc. are the bookrunners.

The deal was expected to price after Monday’s close, though details were not available as of 6 p.m. ET. Ahead of pricing, the company’s stock was down $1.67, or 6.60%, at $23.63.

Proceeds will be used, in part, to pay down a revolving credit facility.

After the bell, IAC/InterActiveCorp. announced a $400 million Rule 144A offering of exchangeable senior notes due 2022.

Like Air Transport, IAC plans to use the funds to repay in full its outstanding 4.875% senior notes due 2018.

Also like Air Transport, IAC’s equity finished the day lower, sliding $3.35, or 2.84%, to $114.69.

Both new issues will be the first convertible bond from their respective issuers.

As for recently priced issues, Marriott Vacations Worldwide Corp.’s $200 million of 1.5% convertible senior notes due 2022 were only slightly better in Monday trading, according to a trader.

The trader saw the issue at 103.554 at mid-afternoon, a gain of 3.6 points.

The underlying shares meantime finished the day up $1.77, or 1.48%, at $121.49.

The deal came Sept. 20 with an initial conversion premium of 30%.

J.P. Morgan Securities LLC, BofA Merrill Lynch and SunTrust Robinson Humphrey were the joint bookrunners.

BioMarin, Novavax better

Among more established names, a trader said BioMarin Pharmaceutical Inc.’s 0.599% convertible notes due 2024 were a shade higher for the day.

He placed the issue at 102.364 at mid-afternoon.

Another market source pegged the paper in a 112 to 112.5 context, which was deemed unchanged on the day.

BioMarin’s shares dipped 56 cents to $94.39.

Meanwhile, Novavax Inc.’s 3.75% convertible notes due 2023 were a point firmer at day’s end, according to a trader.

The trader saw the notes at 48.

Another source quoted the issue at 48 bid, 48.5 offered. That compared to the last round-lot trades around 44.5.

Novavax’s stock traded up a nickel, or 4.31%, to $1.21.

“The stock has been ticking up slowly,” the first trader said. “This one has been down in the doldrums from a long time.”

Mentioned in this article:

Air Transport Services Group Inc. Nasdaq: ATSG

BioMarin Pharmaceutical Inc. Nasdaq: BMRN

IAC/InterActiveCorp. Nasdaq: IAC

Marriott Vacations Worldwide Corp. NYSE: VAC

Novavax Inc. Nasdaq: NVAX

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