Morning Commentary: Realogy convertible notes hit the aftermarket, jump on debut

By Abigail W. Adams

Portland, Me., May 28 – The last new convertible bond deal of the month hit the aftermarket on Friday.

Realogy Holdings Corp. priced an upsized $350 million of five-year exchangeable notes after the market close on Thursday at the rich end of talk with a coupon of 0.25% and an initial exchange premium of 40%.

Price talk was for a coupon of 0.25% to 0.75% and an initial exchange premium of 35% to 40%.

The notes will be issued by Realogy Group LLC and exchangeable for Realogy Holdings shares.

The greenshoe was also upsized to $52.5 million.

The initial size of the offering was $300 million with a greenshoe of $45 million.

The new paper dominated activity in the secondary space, accounting for $72 million of the $165 million on the tape about one hour into the trading session.

The 0.25% notes traded as low as 100.375 and as high as 102.25 early in the session.

The issue was changing hands at 101.75 about one hour after the opening bell, a source said.

The notes expanded 1.5 points to 2 points on a dollar-neutral, or hedged, basis.

Realogy’s stock traded as low as $17.25 before turning positive and trading up to $17.51, an increase of 0.11%, shortly before 11 a.m. ET.

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