Morning Commentary: New WebMD finds welcome; existing WebMDs mixed; Renewable Energy to price

By Rebecca Melvin

New York, May 26 – WebMD Health Corp.’s newly priced 2.625% convertibles were well received in the market early Thursday, with a bid for the new notes at 102 even before final terms were set, according to a New York-based trader.

The new bonds priced ahead of the market open after overnight marketing. They came at the cheap end of talked terms, which were for a 2.125% to 2.625% coupon and a 30% to 35% premium.

The new WebMD bonds were last at 102.75 on an outright basis. Shares of the Elmwood Park, N.J.-based provider of health information services were down $3.86, or 6%, at $63.12.

The bonds also traded at 102.25 versus an underlying share price of $63.42, and at 102.625 versus $62.52, according to a New York-based trader.

“These deltas looked a little bit heavy, but swap trades nevertheless,” the trader said.

WebMD’s existing 2.5% convertibles due 2018 were trading actively early Thursday and edged up slightly from low prints notched Wednesday. They were last at 114.73 compared to 114.25 on Wednesday, but still down from 117.25 on Tuesday.

WebMD’s more equity sensitive 1.5% convertibles due 2020 dropped about 7 points on an outright basis to 135 in active trade, from 142.42 last on Wednesday and about 141 on Tuesday.

Also in the primary market, Renewable Energy Group Inc. launched an offering of $125 million of 20-year convertible senior notes that was seen pricing after the market close at a 3.5% to 4% coupon and 25% to 30% premium.

One trader said that this bond also looked like a good deal to market participants.

The WebMD convertibles were priced via bookrunner Mizuho Securities USA Inc. and the Renewable Energy bonds are being sold via Piper Jaffray & Co.

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