Morning Commentary: Tesla a focus of trade, shares fluctuate; Echo, A. Schulman deals look cheap

By Rebecca Melvin

New York, April 28 – Tesla Motors Inc. remained in trade early Tuesday, moving more or less in line as shares fluctuated. The shares of the Palo Alto, Calif.-based electric car maker were last up about 1% after gaining 6% on Monday.

Elsewhere, market players were looking at two deals in the market, although no gray market was reported yet in the paper ahead of final terms being fixed.

Echo Global Logistics Inc.’s offering of five-year convertible senior notes was looking “pretty cheap and should do well,” a Connecticut-based trader said, citing a valuation that put the deal worth 103.25 at the midpoint of talk, using a credit spread of 600 basis points over Libor and a 30% vol.

The $150 million Echo deal was launched Monday for pricing Wednesday and was talked at a 2.75% to 3.25% coupon and a 27.5% to 32.5% premium.

Also A. Schulman Inc. launched a $110 million offering of cumulative perpetual convertible special stock late Monday with pricing seen after the market close Tuesday. That deal was also seen cheap, according to a convertibles analyst.

The paper was talked at a 6.5% to 7% dividend and a 20% to 25% premium.

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