Vantage Drilling prices new issue; RadioShack keeps on climbing; CompuCredit paper active

By Stephanie N. Rotondo

Phoenix, Aug. 14 - There was more volume in the convertible bond market on Tuesday, according to a trader.

"It's been relatively quiet," he said of the previous session.

The trader also noted that U.S. earnings have been positive. About 75% of earnings out thus far have beaten expectations, he said. As such, investors are more willing to take risks.

"They are looking at things that maybe have a little more risk," he said. However, investors also want something liquid, he added.

Tuesday's session saw a new issue from Vantage Drilling Co., a $56.5 million offering of 7.875% senior convertible notes due Sept. 1, 2042.

The deal traded at par or above.

Meanwhile, RadioShack Corp.'s convertibles remained active and firm. A trader said the gains were being driven by a recently inked credit agreement.

Also active were CompuCredit Holdings Corp.'s convertibles. The issue is not often traded, according to a trader, but recent news of an asset sale has helped improve volume in the name.

And, Eastman Kodak Co. remained topical as the company said late Monday that it was extending the deadline for an auction of its patent portfolio. The bonds held in during the trading session, but questions remained.

Vantage brings new deal

Vantage Drilling priced $56.5 million 7.875% senior convertible notes due Sept. 1, 2042.

Of the funds raised, $50 million will be raised via an underwritten public offering. The remaining $6.5 million was directly placed with F3 Capital.

The issue traded in a range of par to 103 throughout the day's session.

The initial conversion rate is 476.1905 common shares per each $1,000 of notes. The initial conversion price is $2.10, a 23.5% premium over the closing share price of $1.70 on Aug. 13.

Vantage's stock fell 18 cents, or 10.59%, to $1.52 on Tuesday.

Settlement is expected Aug. 21.

Lazard Capital Markets LLC was the underwriter.

Proceeds will be used for capital expenditures, working capital and general corporate purposes.

Vantage Drilling is a Houston-based offshore drilling company.

RadioShack rises again

RadioShack's 6.75% convertible notes due 2019 were again busy and trading higher, according to a trader.

He said the issue - which closed out around 91 on Monday - had hit a high of 94 bid, 95 offered, settling back to 93 bid, 94 offered.

"The credit agreement they announced yesterday was driving that," he said.

The trader was referring to news out Monday in which the Fort Worth-based electronics retailer said it had amended and restated its credit facility.

The new terms provide for a $50 million last-out term loan tranche.

Pricing on the term loan is Libor plus 450 basis points, and it has a $25 million accordion feature.

Proceeds from the term loan will be used for general corporate purposes.

The company's credit facility also provides for a $450 million ABL revolver due Jan. 4, 2016, with size, maturity and pricing remaining in line with the previous revolver.

Pricing on the revolver can range from Libor plus 225 bps to 275 bps based on average availability. There is also an unused fee that can range from 37.5 bps to 50 bps based on average unused commitments.

The amendment and restatement was completed on Aug. 8.

The stock closed down 2 cents at $2.96.

CompuCredit active

CompuCredit Holdings' 5.875% convertible notes due 2035 "have been active lately," a trader said.

"These things didn't trade for months, literally," he said, noting that news out earlier this month regarding an asset sale has been the catalyst for the activity.

He pegged the issue at 44.25 bid, 44.5 offered.

The stock ended the day at $5.08, up 9 cents, or 1.8%.

On Aug. 3, CompuCredit announced that it had sold its debt-recovery business for $130.5 million.

Flexpoint Ford LLC, an equity investment firm, was the buyer.

Under the terms of the sale, CompuCredit will receive $10.8 million from the sold business - named Jefferson Capital - if it meets certain performance targets by Dec. 31, 2014.

Kodak holds in

Eastman Kodak remained an actively traded name as investors pondered what an auction deadline extension means.

A trader said the 7% notes due 2017 were "pretty active," trading in a 10 to 11.25 range.

"They seem to be holding there," he said. "Guess that's peoples' thoughts on a reorganization, maybe what they'll be getting."

The equity traded up nearly 3 cents, or 13.86%, to 23.9 cents.

The bankrupt Rochester, N.Y.-based company's patent portfolio auction was set to expire at 5 p.m. ET on Monday. However, the company then came out to say that it was extending the deadline, as it was still in negotiations with potential bidders.

However, Kodak did not give an exact length of time for the extension.

Also late Monday, Kodak posted business projections, which indicated that top-line revenue growth would bottom in 2012 and begin growing again in 2013.

The company also said its bottom line would improve in 2013.

ATP up as filing looms

ATP Oil & Gas Corp.'s 8% convertible series B perpetual preferred shares (OTCBB: ATPGP) gained 35 cents, or 10.77%, to close at $3.60.

The stock was 6 cents, or 13.9%, higher at 49 cents.

"We're still waiting for these guys to file bankruptcy or make some offer on the bonds so they can avoid bankruptcy," a trader said.

Last week, the Houston-based offshore oil drilling company was reported to have secured a debtor-in-possession loan from Credit Suisse Group AG. A Chapter 11 filing was expected over the weekend but has yet to come.

Mentioned in this article:

Vantage Drilling Co. Amex: VTG

RadioShack Corp. NYSE: RSH

CompuCredit Holdings Corp. Nasdaq: CCRT

Eastman Kodak Co. Pink Sheets: EKDKQ

ATP Oil & Gas Corp. Nasdaq: ATPG

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