American Tower on tap with $1.25 billion mandatory; planned Actavis mandatory upsized

By Rebecca Melvin

New York, Feb. 24 – American Tower Corp. joined the convertibles calendar on Tuesday with a $1.25 billion mandatory convertible preferred stock offering set to price on Wednesday on the heels of Actavis plc’s upsized $4.6 billion mandatory convertible preferred issue set to price late Tuesday.

The Actavis deal was upsized to $4.6 billion from $4.2 billion, and the concurrent common stock offering was downsized to $3.8 billion from $4.2 billion.

The Actavis deal was seen in the gray market ahead of final terms being set at 100.5 to 101, a New York-based trader said.

Back in established issues, there was some price softening as market players looked to sell to make space for the new paper.

There was “a little bit of weakness, but nothing substantial,” a New York-based trader said.

Yahoo! Inc.’s 0% convertible due 2018 was one issue that was a little weaker on the back of news of the planned new issues. Also many in-the-money names were weaker.

Elsewhere, convertible solar names were in focus after news that First Solar Inc. and SunPower Corp. plan to merge certain assets into a publicly traded YieldCo.

The convertibles of San Jose, Calif.-based SunPower were mixed after the news with shares shooting up 18%. One trader said that his desk moved the SunPower 0.75% convertibles up by 0.25 point, but some players moved their mark lower, he said.

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