HomeAway markets $350 million five-year convertibles; secondary mostly quiet; Genco climbs

By Cristal Cody

Tupelo, Miss., March 24 - The convertibles market ended Monday mostly quiet with light trading, according to market sources.

"Not a lot traded today," one trader said. "There's not a lot of earnings going on right now anyway, and the Monday after a weekend is usually a pretty slow day."

HomeAway, Inc. announced plans to be in the market with a $350 million offering of five-year convertible senior notes.

HomeAway's underlying shares were weaker on the day, ending at $39.54, down $1.33, or 3.25%.

In other trading, Genco Shipping & Trading Ltd.'s 5% convertible senior notes due 2015 climbed on the day after the company announced late in the previous week that it paid an interest payment, according to market sources.

HomeAway to sell $350 million

HomeAway's $350 million offering of five-year convertible senior notes will price in a Rule 144A-eligible private placement deal, which includes a $52.5 million over-allotment option, according to the company.

The notes will be convertible prior to the close of business on the business day preceding Oct. 1, 2018 at the option of noteholders upon the satisfaction of specific conditions and only during certain periods. Thereafter, until the close of business on the second scheduled trading day preceding maturity, the notes will be convertible at the option of the noteholders at any time.

The conversion of the notes will be settled in cash, shares of HomeAway's common stock or a combination of cash and stock.

In connection with the notes offering, HomeAway expects to enter into privately negotiated convertible note hedge transactions to reduce the potential dilution to the company's common stock upon any conversion of notes and/or offset any cash payments.

HomeAway also plans to enter into privately negotiated warrant transactions with the hedge counterparties.

The Austin, Texas-based online vacation rental marketplace expects to use the proceeds to pay the cost of the convertible note hedge transactions and for general corporate purposes.

Genco rises

In trading on Monday, Genco Shipping & Trading's 5% convertible notes due 2015 rose to the 85 bid, 86 offered area from 80 on Friday, a trader said.

The notes traded higher "on less than round lots," the trader said.

Genco Shipping & Trading sold $125 million of the convertible notes in 2010 at par.

The company's underlying shares fell 1 cent, or 0.65%, to end at $1.53 on Monday.

The ocean bulk cargo transporter is based in New York City.

Tesla falls

Tesla Motors, Inc.'s 1.5% convertible senior notes due 2018 fell to 188.67 from 193.78 on Friday, according to a market source.

Tesla Motors sold $660 million of the convertible notes on May 16, 2013 at par.

The company's underlying shares dropped $8.72, or 3.81%, to close at $220.17, up from early morning lows of $216.74.

The electric vehicle manufacturer is based in Palo Alto, Calif.

Mentioned in this article:

Genco Shipping & Trading Ltd. NYSE: GNK

HomeAway Inc. Nasdaq: AWAY

Tesla Motors, Inc. Nasdaq: TSLA

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