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Morning Commentary: Kite Realty convertible notes, South Jersey equity units price
By Abigail W. Adams
Portland, Me., March 18 – What many expect to be the last new paper in another high-volume week for the convertibles primary market hit the aftermarket on Thursday.
Kite Realty Group Trust priced $175 million of six-year exchangeable notes (Baa3) and South Jersey Industries Inc. priced $300 million, or 6 million three-year $50-par equity units, after the market close on Wednesday.
Both offerings priced cheap and hit the aftermarket on a heavy day for equities with the tech sector again under pressure on inflation concerns.
South Jersey Industries’ equity units were trading below par early in the session.
Kite Realty comes cheap
Kite Realty priced $175 million of six-year exchangeable notes after the market close on Wednesday at par with a coupon of 0.75% and an initial exchange premium of 25%.
Pricing came at the cheap end of talk for a coupon of 0.25% to 0.75% and an initial exchange premium of 25% to 35%, according to a market source.
The notes will be issued by Kite Realty Group LP and exchangeable for Kite Realty Group shares.
South Jersey prices
South Jersey Industries priced $300 million, or 6 million three-year $50-par equity units, after the market close on Wednesday at par with a yield of 8.75% and a threshold appreciation premium of 17.5%, according to an FWP filing with the Securities and Exchange Commission.
Pricing came at the cheap end of talk for a yield of 8.25% to 8.75% and a threshold appreciation premium of 17.5% to 22.5%, according to a market source.
The new paper was trading below its issue price early in the session.
The units were marked at $49.50 bid, $49.80 offered versus a stock price of $22.50, a source said.
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