Morning Commentary: Planned SunEdison offering looks cheap; older SunEdisons trade down

By Rebecca Melvin

New York, Jan. 21 – SunEdison Inc.’s planned $350 million of 7.25-year convertible senior notes were seen worth 102.8 at the midpoint of price talk using a credit spread of 625 basis points over Libor and 37% vol., a Connecticut-based trader said early Wednesday.

The deal was talked at a coupon of 2.125% to 2.625% and an initial conversion premium of 32.5% to 37.5%, and it represents SunEdison’s fourth convertible bond deal priced in a little more than a year.

The older bonds were all said to have traded down in the early going Wednesday, but the underlying shares were up.

In June, the St. Peters, Mo.-based silicon wafer maker priced $600 million of 0.25% convertibles due 2020. Those bonds were said to have dropped 1.5 points to 2 points to 95, a New York-based trader said.

A second trader said that the older 0.25% convertibles were lower at 93.

In December 2013, the company priced $600 million of 2% convertibles due 2018 and $600 million of 2.75% bonds due 2021. Those bonds were both said to be down 0.5 point to 0.75 point.

The SunEdison 2% convertibles, or the As, were seen at 141.375, and the 2.75% convertibles, or the Bs, were seen at 144.25, a trader said.

SunEdison shares were up on the heels of the news and were last seen up 53 cents, or nearly 3%, to $19.09.

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