Morning Commentary: New, upsized SunEdison perpetual convertible preferreds jump in early trading

By Rebecca Melvin

New York, Aug. 18 – SunEdison Inc.’s newly priced 6.75% perpetual convertible preferred shares traded up as much as 5 points Tuesday after the St. Peters, Mo.-based solar technology company priced an upsized $650 million of the securities at the rich end of talked terms, market sources said.

The new SunEdison 6.75% preferred was quoted last 104.475 bid, 105.125 offered versus an underlying share price of $14.68. That level was up 4 points on a swap basis, a Connecticut-based trader said.

The newest convertible joins three other SunEdison tranches that priced earlier this year, and then a few older ones as well.

But despite the large amount of SunEdison paper in the convertible space, this new issue did well.

“It’s cheap; it has a big coupon,” a New York-based trader said by way of explanation for the warm reception from investors.

The existing SunEdisons were also in trade, but it wasn’t yet known how the older paper was faring.

The SunEdison common shares were off a little more than 1% at $14.40 last.

Elsewhere, the summer doldrums were evident. Trading volume in the convertibles market was light, a trader said.

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