Morning Commentary: Verint Systems, Century Aluminum eyed

By Abigail W. Adams

Portland, Me., April 6 – It was another quiet morning for the convertibles primary market with no deals launched and two small offerings set to price after the market close.

Century Aluminum Co. plans to price $75 million of seven-year convertible notes and Verint Systems Inc. plans to price $250 million of five-year convertible notes.

Both offerings looked cheap based on underwriters’ assumptions; however, Century Aluminum’s offering was too small for most accounts to participate in, sources said.

Verint Systems eyed

Verint Systems plans to price $250 million of five-year convertible notes after the market close on Tuesday with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 30% to 35%, according to a market source.

The deal was marketed with assumptions of 300 basis points over Libor and a 40% vol., which looked about 3.41 points cheap at the midpoint of talk, sources said.

Verint Systems is a serial issuer of convertible notes and is well-known to the buyside, a source said.

The deal is expected to do well.

Century Aluminum eyed

Century Aluminum plans to price $75 million of seven-year convertible notes after the market close on Tuesday with price talk for a coupon of 2.25% to 2.75% and an initial conversion premium of 20% to 25%, according to a market source.

The deal was heard to be in the market with assumptions of 834 bps over Libor and a 40% vol., according to a market source.

Using those assumptions, the deal looked about 3.5 points cheap at the midpoint of talk.

However, the deal was too small for most accounts to consider unless it upsized significantly, a source said.

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