Twitter’s upsized $1.8 billion deal slips to 99ish on debut; REITs dip; Liberty Media down

By Rebecca Melvin

New York, Sept. 12 – Twitter Inc.’s newly priced convertible bonds traded down about a point on their debut in the secondary market on Friday after the San Francisco-based social media company priced an upsized $1.8 billion of five- and seven-year notes at the midpoint of talk, market sources said.

The combined Twitter tranches were upsized to $1.8 billion from $1.3 billion, and “they traded down under their own weight,” a New York-based trader said.

Despite the weak debut, the Twitter deal was seen as a positive development for the convert space in that it was likely to attract other solid issuers.

On Friday, rate-sensitive names, particularly longer-dated issues, took a hit as rates widened. The yield on 10-year Treasuries widened to about 2.61% by the end of the session.

“REITS are getting crushed,” a New York-based sellsider said of the real-estate-investment trust sector.

Both Prologis Inc. and Extra Space Storage Inc. were down on an outright and dollar-neutral, or hedged, basis. But DDR. Corp. was seen a bit better on hedge. Shares of the three REITs were sharply lower.

Another notable loser was the rather long-dated Liberty Media Corp.’s 1.375% convertible due 2023. Those bonds traded at 100.625 versus a share price of $48.76 in the early going, which was down another 0.5 point on the day, and down about 2.5 points for the week, a New York-based trader said.

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