Morning Commentary: Planned Aceto looks cheap, shares fall; SunEdison 2.75% notes drop to 58

By Rebecca Melvin

New York, Nov. 10 – U.S. convertibles players were sizing up a new issue from Aceto Corp. early Tuesday, which was seen as cheap for investors, according to one source, who valued the paper at 103.7 using a credit spread of 475 basis points over Libor and 35% vol. at the midpoint of price talk.

The Aceto $125 million deal was launched late Monday for pricing after the market close on Tuesday and was talked at a coupon of 1.75% to 2.25% with a 27.5% to 32.5% initial conversion premium.

Shares of the Port Washington, N.Y.-based marketer and distributor of pharmaceutical ingredients fell in the early going and were last seen down $2.02, or 7.4%, to $25.58.

Back in established issues, SunEdison Inc.’s convertibles were falling after the solar technology company reported a wider-than-expected loss for its third quarter. Shares were last down 19%.

The SunEdison 2% convertibles due 2018, or the A tranche, were seen to have traded at 66, which was down from about 77 on Monday, according to Trace data.

The SunEdison 2.75% convertibles due 2021, or the B tranche, changed hands at 60 and then at 58, which was down from about 73 on Monday.

Shares of the St. Peters, Mo.-based solar technology company fell $1.39, or 19%, to $6.03.

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