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Morning Commentary: Pandora busy, gyrating post-pricing; Vitamin Shoppe subdued; Kinder declines
By Stephanie N. Rotondo
Seattle, Dec. 4 – The convertible bond market was focused on Pandora Media Inc.’s new $300 million of 1.75% convertible senior notes due 2020, a trader reported early Friday. The initial conversion premium is 30%.
The deal came via Morgan Stanley & Co. LLC with price talk for a yield of 1.75% to 2.25% and a conversion premium of 25% to 30%.
The trader said the new issue was gyrating in early trades, quoted as low as 99.375 bid, par offered and trading as high as 102 versus the previous day’s closing share price of $12.63.
At mid-morning, the paper was around 100.5, the trader said.
The stock underlying the bonds (NYSE: P) was down nearly 2.5%.
Meanwhile, the Vitamin Shoppe Inc.’s $125 million of 2.25% convertible senior notes due 2020 – a deal priced late Thursday – were on the quiet side, according to a trader.
“But that stock is up on the day,” he said.
The equity (NYSE: VSI) was up almost 1.5% at mid-morning.
The trader said that he saw the notes offered at 101.25, then at par. Paper then traded at 100.625.
Away from deals priced this week, a trader noted that Kinder Morgan Inc.’s $1.57 billion of 9.75% mandatory convertible preferred stock – a deal priced Oct. 27 at $49.00 per share, with a par value of $50 – was getting crushed.
The trader said the paper was trading “either side of $36.”
Additionally, the stock (NYSE: KMI) has plummeted from $27.28 on the day of issuance to $17.98, the trader said.
The equity was off over 6% in early Friday trades.
“There’s a lot of stuff like that,” the trader said of the losses. “Stocks are getting crushed in this space.”
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