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Morning Commentary: New deal from Horizon Global pops; Virtus holds up post-pricing; TPG at par
By Stephanie N. Rotondo
Seattle, Jan. 27 – A flurry of new convertible issues had the market hopping early Friday.
A trader said Horizon Global Corp.’s $110 million of 2.75% convertible senior notes due 2022 were going “up, up, up,” trading around 104.5.
He noted that there were prints as high as 105.25 in early dealings.
The company’s stock (NYSE: HZN) was also faring well, rising 80 cents, or 4.26%, to $19.56 at mid-morning.
The deal came late Thursday, upsized from $100 million. Pricing was on the rich end of the 2.75% to 3.25% yield talk. A 35% initial conversion premium was richer than the initial 27.5% to 32.5% talk.
J.P. Morgan Securities LLC, Wells Fargo Securities LLC, BofA Merrill Lynch and BMO Capital Markets ran the books.
Meanwhile, Virtus Investment Partners Inc.’s $100 million of 7.25% series D mandatory convertible preferred stock – a deal that priced Friday with a conversion premium of 20% – was pegged “around par.”
The underlying equity (Nasdaq: VRTS) was off $1.70, or 1.53%, at $109.45 in early trading.
The dividend came at the middle of the 7% to 7.5% talk, with an initial conversion premium coming in the middle of the 17.5% to 22.5% talk.
Barclays, JPMorgan, BofA and Morgan Stanley & Co. LLC were the bookrunners.
However, a trader said TPG Specialty Lending Inc.’s $100 million of 4.5% convertible senior notes due 2022 weren’t all that busy, though they were trading above par.
The stock (NYSE: TSLX) was down a penny at $18.55.
That deal also came late Thursday with an initial conversion premium of 15%. The premium was in line with talk, while the yield was at the cheap end of the 4.25% to 4.5% talk.
BofA Merrill Lynch and Morgan Stanley led the deal.
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