SunEdisons lower on swap in active trade; Ctrip.com expands; Vipshop lower; Cowen prices

By Rebecca Melvin

New York, May 14 – SunEdison Inc.’s complex of convertibles continued to trade actively and ended the session a little lower on swap on Thursday, a day after the St. Peters, Mo.-based solar technology company priced $750 million of new convertibles in two tranches.

SunEdison’s series of six convertible issues contracted anywhere between 0.125 point to 0.5 point, a New York-based trader said.

A second New York-based trader said, “Overall, it was pretty slow. But SunEdison continues to be a focus.”

Elsewhere, Ctrip.com International Ltd.’s convertibles jumped on an outright basis and expanded on swap in active trade after the Shanghai-based internet travel site reported earnings that beat estimates and guided for strong current-quarter revenue growth.

Other Chinese internet names were also in trade. Vipshop Holdings Ltd.’s 1.5% convertible notes due 2019 were lower with shares – changing hands at around 140 – after the China-based online discount retailer reported solid earnings but guided below expectations for the current quarter.

The energy sector was also something of a focus, and those names were “a little better, and technology was better bid,” a New York-based trader said.

Energy XXI (Bermuda) Ltd. was a name in trade in the energy sector. “There was a pretty big move in the second liens, and in the straights, there was a move of a couple of points,” a trader said of Energy XXI.

The Energy XXI 3% convertibles were seen lower by 3 points at 36 compared to 39 previously, but shares of the Houston-based energy exploration and production company fell by 4%, or 15 cents, to $3.66.

Meanwhile, names like Nvidia Corp. and VeriSign Inc. were better bid in technology, and Twitter Inc.’s 0.25% convertibles were better, in particular. “There were a lot of outright buyers,” the trader said.

Meanwhile, Cowen Group Inc. priced its $105 million of cumulative perpetual convertible preferred shares at the midpoint of talk for a 5.625% dividend and 17.5% premium.

A level on the new paper was not heard, but a syndicate source said “they traded all over the place.”

The older Cowen 3% convertibles were “down small,” the source said. And Cowen shares ended down 12 cents, or 2%, to $5.37.

SunEdison complex lower

In the early going, the SunEdison convertibles were seen to have traded up, but later they traded lower, a New York-based trader said.

They were essentially unchanged on an outright basis but lower on swap, he said.

On Wednesday, the two new tranches had been mixed on swap, with the longer-dated F notes outperforming the E notes on swap.

But on Thursday, the new SunEdison 2.625% convertibles due 2023, or the E series, and the new SunEdison 3.375% convertibles due 2025, or the F tranche, were down 0.125 point to 0.375 point on swap.

SunEdison shares on Wednesday ended up 88 cents, or 3.2%, at $28.49, and on Thursday, the shares ended up 21 cents, or 0.7%, at $28.70.

SunEdison’s older bonds remained active on Thursday, and they were all seen a bit lower.

SunEdison’s older 2% convertibles due 2018, of which $600 million priced Dec. 12, 2013, were seen crossing the Trace tape at 199.5 late in the session. On Wednesday they had been up at 205.

The SunEdison’s 2.75% convertibles due 2021, a second tranche of $600 million that also priced Dec. 12, 2013, traded late in the session at 204.5, according to Trace data.

About $300 million of the 2018 notes and $300 million of the 2021 notes are being exchanged for the shares underlying those notes plus about $62.5 million in cash.

Ctrips jump outright

Ctrip’s 1.75% convertibles due 2018 jumped to 119.5 in early trade when the underlying shares were around $74.65. And they were seen to have settled at 115.6 compared to 111.2 previously, according to a market source.

The Ctrip 0.5% convertibles due 2017 were seen to have closed at 368.75, which was up from 338 to 339 previously.

Ctrip shares pared some of their early gains but were still up $5.78, or 9%, at $71.14 at the close.

The Ctrip bonds expanded about a point on a dollar-neutral, or hedged, basis even as the company’s shares surged 14%, a New York-based trader said.

The company reported strong first-quarter results. Its quarterly loss narrowed to 15 cents per share, which was better than the 25-cent-per-share loss expected.

Revenue rose 46% from the year-earlier quarter to $373 million, which was the high end of $356 million to $382 million guidance and above estimates for $363 million in revenue.

Cowen prices at the mids

Cowen priced $105 million of perpetual convertible preferred shares near the midpoint of price talk, which was for a 5.375% to 5.875% yield and a 15% to 20% premium.

The Rule 144A issue of 105,000 shares at $1,000 each were priced to yield 5.625% with a 17.5% initial conversion premium.

Joint bookrunners were Nomura Securities International, Inc., SunTrust Robinson Humphrey Inc. and Cowen and Co. LLC.

The preferreds are non-callable for five years and then are provisionally callable if the common stock exceeds 150% of the conversion price.

In connection with the pricing of the notes, the company entered into a capped call option transaction with Nomura.

Proceeds will be used to fund the capped call and for general corporate purposes.

New York-based Cowen is a financial services company.

Mentioned in this article:

Cowen Group Inc. Nasdaq: COWN

Ctrip.com International Ltd. Nasdaq: CTRP

Energy XXI (Bermuda) Ltd. Nasdaq: EXXI

Nvidia Corp. Nasdaq: NVDA

Vipshop Holdings Ltd. Nasdaq: VIPS

SunEdison Inc. Nasdaq: SUNE

Twitter Inc. Nasdaq: TWTR

VeriSign Inc. Nasdaq: VRSN

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