Jakks shares drop ahead of pricing; Insulet, Laclede, and TPG Specialty launch new deals

By Rebecca Melvin

New York, June 3 - Jakks Pacific Inc.'s planned offering of six-year convertibles was being marketed during Tuesday's session and the upsized $100 million deal priced after the market close with a 4.875% coupon, which was toward the cheap end of talk, and a 25% initial conversion premium, which was at the cheap end of talk. Shares of the Malibu, Calif.-based toy and leisure products company slid 10% during the session.

After the market close, three new U.S. convertibles issues launched following a generally quiet trading session.

Insulet Corp.'s newly launched $175 million offering of five-year convertible notes was seen pricing ahead of the market open on Wednesday and was talked to yield 2% to 2.5%, with an initial conversion premium of 27.5% to 32.5%.

The Bedford, Mass.-based medical device maker said proceeds would be used to repay its existing 3.75% convertibles due 2016.

Laclede Group Inc. launched an offering of $125 million of mandatory convertibles that was seen pricing after the market close on Wednesday to yield 6.75% to 7.25% with an initial conversion premium of 22.5% to 27.5%. Laclede is a St. Louis-based utility.

TPG Specialty Lending Inc., a Fort Worth, Texas-based specialty finance investment company, was expected to price $100 million of five-year convertible bonds also after the market close on Wednesday. That deal was talked to yield 4.25% to 4.75%, with an initial conversion premium of 17.5% to 22.5%.

Back among established issues, Newmont Mining Corp. was said to be in trade, with the convertibles in line with the shares of the Denver-based gold and copper mining company. The shares were in negative territory much of the session but ended higher by 24 cents, or 1.1% to $22.82.

Newmont was the most active of gold names, a New York based trader said. The notes ended at 104.375 bid, 104.875 offered with the shares at $22.82. That was "in line with yesterday," the trader said.

Elsewhere, Alliant Techsystems Inc.'s 3% convertibles were trading actively for a second straight session on the heels of the company's tender offer for the paper announced on Monday. The bonds were said to be trading at parity plus 1.25 point, which was up from Monday's average trade at parity plus 0.95 point.

Market players are thought to be considering holding on to the option and not tendering in expectation that the Arlington, Va.-based aerospace and defense company potentially sweetens its offer, the trader said.

Alpha Natural Resources Inc. was also mentioned as a name in trade and those bonds moved lower by 0.5 point to 72.125 bid, 72 offered, a New York-based trader said. Shares of the Bristol, Va.-based coal miner closed down 1.2%.

Jakks Pacific upsizes

Jakks' convertible deal was increased by $25 million to $100 million.

The convertible bullets was seen "about as cheap as the company's older bonds," a Connecticut-based convertibles analyst said Tuesday.

Proceeds of the new bonds, which priced with a 4.875% coupon and 25% initial conversion premium, will be used to redeem the company's $39 million outstanding of 4.5% convertible bonds due November 2014. Jakks also has a third issue of 4.25% convertibles due 2018 of which there is about $100 million outstanding. The older bonds were not heard in trade.

Given that the Jakks 4.5% convertibles are essentially "money good now, the odds of a holder trading them are small," a New York-based trader said.

The Jakks 4.25% convertibles were indicated lower at about 110.6 from 115.9, according to a market source.

Insulet to price $175 million

Insulet launched an offering of $175 million of five-year convertible notes after the market close Tuesday that were seen pricing ahead of the open on Wednesday and were talked to yield 2% to 2.5%, with an initial conversion premium of 27.5% to 32.5%, according to a syndicate source.

The registered, off-the-shelf deal has a $26.25 million greenshoe, and was being sold via J.P. Morgan

Securities LLC as sole bookrunner.

The notes are non-callable for three years, and then provisionally callable for one year if shares exceed 150% of the conversion price. They are freely callable after that.

Proceeds will be used for general corporate purposes, including the possible repurchase, redemptions and/or settlement of conversions of Insulet's existing 3.75% convertibles due 2016.

Insulet is a Bedford, Mass.-based medical device maker.

Laclede to price mandatory

Laclede's registered offering of $125 million in equity units was talked to yield 6.75% to 7.25% with an initial conversion premium of 17.5% to 22.5%, according to a syndicate source.

Laclede is also offering of up to 9 million of common shares.

Pricing was expected late Wednesday. Settlement for the mandatory equity units, which will be issued in a stated amount of $50, will be April 1 2017.

There is a greenshoe for up to $18.8 million of additional equity units.

Proceeds from both offerings will be used to fund a portion of the cash consideration payable in connection with the pending acquisition of Alabama Gas Corp.

Credit Suisse, Wells Fargo Securities, J.P. Morgan Securities LLC and RBC Capital Markets are lead book-running managers for the units.

TPG plans $100 million deal

TPG launched an offering of $100 million of five-year convertible bonds after the market close Tuesday that were seen pricing after the market close Wednesday and were talked to yield 4.25% to 4.75%, with an initial conversion premium of 12.5% to 17.5%, according to a syndicate source.

In connection with the private offering, the company plans to disclose certain information to potential investors some of which has not been previously reported, according to a release.

The notes are non-callable for life, and are being marketed by bookrunners Bank of America Merrill Lynch and J.P. Morgan Securities LLC. There is a $15 million greenshoe.

All of the proceeds will be used to pay down TPG's revolving credit facility on or about the closing date of the offering.

Mentioned in this article:

Alliant Techsystems Inc. NYSE: ATK

Alpha Natural Resources Inc. NYSE: ANR

Insulet Corp. Nasdaq: PODD

Jakks Pacific Inc. Nasdaq: JAKK

Newmont Mining Corp. NYSE: NEM

The Laclede Group Inc. NYSE: LG

TPG Specialty Lending Inc. Nasdaq: TSLX

© 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.