Morning Commentary: Atlas Air struggles post-pricing; RealPage performs well; Becton lists on NYSE

By Stephanie N. Rotondo

Seattle, May 18 – Convertible bond investors had $560 million in new paper to play with as Thursday’s session got underway.

New issues from Atlas Air Worldwide Holdings Inc. and RealPage Inc. entered the market, with Atlas selling $260 million of 1.875% convertible senior notes due 2024 and RealPage selling $300 million of 1.5% convertible senior notes due 2022.

The Atlas deal – which was run by Morgan Stanley & Co. LLC, BNP Paribas Securities Corp. and Citigroup Global Markets Inc. – came upsized from $250 million and with an initial conversion premium of 32.5%.

Upon pricing, a trader said the new issue was “struggling a bit,” pegging the paper in a 99.875 to par context, as the underlying stock (Nasdaq: AAWW) retreated 15 cents to $45.95.

As for RealPage, the Rule 144A offering came with a 27.5% initial conversion premium.

A trader said the deal was “doing a bit better” than the Atlas issue, trading at 101 bid against a stock price (Nasdaq: RP) of $32.90.

Morgan Stanley and BofA Merrill Lynch were the bookrunners.

Meanwhile, Becton, Dickinson & Co.’s $2,475,000,000 of 6.125% series A mandatory convertible preferred stock – a deal priced May 11 with an initial conversion premium of 20% – listed on the New York Stock Exchange on Thursday under the ticker symbol “BDXA.”

The convertible preferreds were seen at $51.98 at mid-morning, down from $52.25 at the open.

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