Wright Medical trades up in the gray; old Wright Medical adds; secondary market softer

By Rebecca Melvin

New York, Feb. 9 – Wright Medical Group Inc.’s planned $400 million of five-year convertible senior notes was higher in the gray market on Monday ahead of final terms seen being fixed after the close, market sources said.

The planned Wright Medical convertible was seen in the gray market at 101.25 bid, 101.75 offered and as high as 102, one trader said. There was talk of the issue being upsized to $550 million, but that could not be confirmed.

One trader said he thought the deal would come on the rich side of talked terms, which was for a 2% to 2.5% coupon and a 17.5% to 22.5% initial conversion premium.

Wright Medical’s existing 2% convertibles due 2017 were mostly quiet during the session, but they traded higher toward the end of the day amid talk that the company will pay an additional point or two to redeem the notes. About $250 million of the proceeds from the new issue will be used to buy back most of the older deal, a New York-based trader said.

A second new deal launched in Monday’s session for pricing on Wednesday was Global Eagle Entertainment Inc.’s $75 million of 20-year convertible senior notes.

Shares of the California-based in-flight video content and e-commerce provider plunged 14% on the heels of the news.

Elsewhere, the convertibles market was mostly soft, a New York-based trader said.

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