Egalet seen at par; Trinity Biotech on tap; UTi Worldwide up after disappointing results

By Rebecca Melvin

New York, April 1 – Egalet Corp.’s newly priced 5.5% convertibles were quoted at 100 early Wednesday after the Wayne, Pa.-based specialty pharmaceutical company priced $60 million of the five-year notes in an overnight deal that was privately marketed.

The new bonds did not trade actively, a syndicate source said. Meanwhile, Egalet shares fell $1.49, or 11.5%, to $11.44 on the heels of the deal.

After the market close, another small deal hit the primary market. Ireland’s Trinity Biotech plc said it plans to price $100 million of 30-year exchangeable senior notes on Thursday in a Rule 144A deal.

Back in secondary market action, a trader said that the session was pretty quiet once again.

“It’s been quiet this week, in general,” a New York-based trader said.

One name seen in trade was UTi Worldwide Inc. Its convertibles were lower outright, but in line or better on a dollar-neutral, or hedged, basis, a New York-based trader said, after the Virgin Islands-based ocean freight and logistics company reported a wider quarterly loss and reduced guidance for its fiscal full-year 2016.

Also seen in trade was Seacor Holdings Inc.’s 2.5% convertibles, which were quoted at 102 bid, 102.5 offered versus an underlying share price of $69.67.

Trading in the Seacor bond was “gapp-y,” amid shares that have come off this week, the trader said.

Whiting Petroleum Corp. continued to move up amid a hefty bump up in crude oil prices. The Whiting Petroleum bonds were seen in action at more than 107.

Tesla Motors Inc.’s 1.5% convertibles changed hands around 161, a trader said, and that looked to be off a bit but in line with shares.

SanDisk Corp.’s two convertible bonds remained active in trade for a second straight day, and both issues bounced back a little bit in line with the underlying shares of the Milpitas, Calif.-based storage chip maker.

Equities slipped on the first day of the second quarter amid disappointing economic data.

Private payrolls increased by 189,000 last month, which was the smallest gain since January 2014, according to Wednesday’s ADP National Employment Report. That was well below economists' expectations for an increase of 225,000.

In addition, the Institute for Supply Management said its national factory activity index fell to 51.5 in March, the lowest reading since May 2013 and down from 52.9 in February.

The S&P 500 stock index fell 8.20 points, or 0.4%, to 2,059.69; the Nasdaq stock index lost 20.66 points, or 0.4%, to 4,880.23, and the Dow Jones industrial average shed 77.94 points, or 0.4%, to 17,698.18.

New Egalet at par

Egalet’s new 5.5% convertibles due 2020 were quoted at 100 early Wednesday.

Shares of the company dropped $1.49, or 11.5%, to $11.44 on the heels of the deal.

The bonds were sold primarily to fundamental investors, a syndicate source said.

The company priced $60 million of the five-year notes in an overnight deal that was privately marketed.

Its initial conversion price was 15% above its closing share price Tuesday.

The Rule 144A deal has a $9 million greenshoe and was sold via joint bookrunners JMP Securities Guggenheim Securities.

The notes are non-callable, and proceeds will be used to fund the commercialization of its approved products, to fund research and development related to its product candidates, Egalet-001 and Egalet-002, and for working capital and other general corporate purposes.

Trinity Biotech to price

Trinity Biotech plans to price $100 million of 30-year exchangeable senior notes through a wholly owned subsidiary.

The deal, which has a $15 million greenshoe, is being sold via bookrunner Raymond James & Associates Inc.

Price talk was not immediately available.

The exchangeables are non-callable until April 1, 2020 and then are provisionally callable for two years if the share price exceeds 130% of the conversion price. After April 1, 2022, the bonds are freely callable.

For bonds redeemed prior to April 1, 2022, there is a make-whole premium for unpaid interest.

Holders may put the bonds on April 1 of years 2022, 2025, 2030, 2035 or 2040.

Net proceeds are expected to be used for potential future acquisitions and for general corporate purposes, which may include continued product development and commercialization.

Trinity Biotech makes and markets diagnostic reagents and instruments.

UTi Worldwide outperforms

UTi Worldwide’s 4.5% convertibles due 2019 were 102.25 bid, 103 offered versus an underlying share price of $10.37, a New York-based trader said. That was down from about 110 previously, but higher on a swap basis by 0.375 point to 0.5 point, assuming a delta of 70% to 72%, the trader said.

A second New York-based trader disagreed, however.

“I think that looks high,” he said, adding that few, if any, market players were on a 70% to 72% delta, and that the bond looked to be lower than where it went out on Tuesday by at least 0.5 point.

Disappointing results and guidance pulled the UTi stock and bonds into trade. Shares slumped $2.32, or 19%, to $9.98.

Results for its fiscal fourth-quarter 2015 missed analysts' estimates, and the company guided lower for full-year 2016.

For the period ended Jan. 31, UTi reported a loss of $103.9 million, or $1.02 a share, compared to a loss of $56 million, or 53 cents per share, in the year-earlier period. Analysts expected earnings of 8 cents a share for the quarter.

Revenue fell 11% to $964.6 million for the quarter, below analysts' estimates of $1.08 billion.

The company said results were adversely affected by one-time charges stemming from restructuring and reorganization efforts in January. Revenue was down due to lower airfreight-forwarding and ocean-freight-forwarding yields, lower freight-forwarding volume and currency effects.

Looking ahead, the company pulled its full-year 2016 EBITDA guidance down to a range of $125 million to $150 million from its previous range of $190 million to $201 million for the fiscal year.

Mentioned in this article:

Egalet Inc. Nasdaq: EGLT

Seacor Holdings Inc. NYSE: CKH

SanDisk Corp. Nasdaq: SNDK

Tesla Motors Inc. Nasdaq: TSLA

Trinity Biotech plc Nasdaq: TRIB

UTi Worldwide Inc. Nasdaq: UTIW

Whiting Petroleum Corp. NYSE: WLL

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.