Liberty Media deal on tap; Cobalt stays busy; Akamai at a premium; Tesla holds its ground

By Stephanie N. Rotondo

Seattle, Aug. 11 – Another large new issue was added to the convertibles calendar on Thursday as Liberty Media Corp. said it planned to privately place $425 million of senior debentures exchangeable for Time Warner Inc. stock.

Price talk on the Rule 144A deal is 2% to 2.5%, a market source reported. The initial exchange premium is expected to be 27.5% to 32.5%.

Morgan Stanley & Co. LLC is the bookrunner.

A trader said he had not heard much on the deal.

“Quiet on Liberty,” he said. “It feels like a Saturday afternoon and not Thursday.”

Among established issues, a trader said Cobalt International Energy Inc.’s 2.625% convertible notes due 2019 continued to trade on the active side, though they remained “under 40.”

“They have sat at this level for like a week now, which is pretty amazing [considering] how much volume has traded,” he said.

However, later in the day the paper was seen pushing up to north of 40.

While the convertibles improved a touch, the stock underlying the debt fell 2 cents to 84 cents.

The bonds got active – and pressured – last week after the company reported not only weak quarterly results, but also that a sale of its Angola properties had hit a snag.

Meanwhile, Akamai Technologies Inc.’s 0% convertible notes due 2019 were busy, a trader said.

However, there was no fresh news to act as a catalyst.

The trader also expressed surprise at how high a premium the notes were trading at. At either side of 97.5, that equaled a nearly 70% premium, he said.

The stock meantime fell 61 cents, or 1.17%, to $51.41.

Another active name was Tesla Motors Inc.

A trader pegged the 1.25% convertible notes due 21 at 86.625 bid, 86.875 offered. Another market source saw the issue trade as high as 87, though most of the trades occurred just south of there.

The levels were generally unchanged on the day, though the stock declined 74 cents to $224.91.

Last week, the electric car manufacturer reported earnings that missed expectations. On Aug. 8, the company said it would use about a third of its liquidity on debt payments and planned expenditures.

Mentioned in this article:

Akamai Technologies Inc. Nasdaq: AKAM

Cobalt International Energy Inc. NYSE: CIE

Liberty Media Corp. Nasdaq: BATRR

Tesla Motors Inc. Nasdaq: TSLA

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