Limelight convertibles skyrocket; LendingTree gains; Twitter, American Airlines active

By Abigail W. Adams

Portland, Me., July 23 – New paper was in focus in the secondary space on Thursday after the convertibles primary market squeaked out an overnight deal.

Limelight Networks Inc. priced an upsized $110 million of five-year convertible notes after the market close on Wednesday.

The notes were priced to move, a source said, and move they did.

The 3.5% notes skyrocketed on an outright and dollar-neutral basis on their secondary market debut.

LendingTree Inc.’s newly priced 0.5% convertible notes due 2025 remained active with the notes continuing to post gains their second day in the secondary space.

The overall tone in the secondary space remained strong on Thursday despite a sell-off in equities that was fueled by an increase in jobless claims and China-related rumors, sources said.

The market remained better to buy with earnings-related news pushing some outstanding convertible notes higher.

Twitter Inc.’s 0.25% convertible notes due 2024 were posting gains alongside stock following its earnings report.

American Airlines Group Inc.’s 6.5% convertible notes due 2025 were also active and making gains on an outright basis following earnings.

Limelight skyrockets

Limelight priced an upsized $110 million of five-year convertible notes after the market close on Wednesday at the cheap end of talk with a coupon of 3.5% and an initial conversion premium of 27.5%.

Price talk was for a coupon of 3% to 3.5% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

The initial size of the offering was $100 million.

The offering was marketed with assumptions of 800 basis points over Libor and a 40% vol., which looked 8.625 points cheap at the midpoint of talk, a source said.

While the deal was small, the notes were active and making large gains on an outright and dollar-neutral basis.

The 3.5% notes traded up to 103.5 early in the session as stock sank more than 6%.

They were seen changing hands around 103 in the afternoon but came in alongside stock to close the day at 101, sources said.

With stock “whooped” on Thursday, the notes expanded upwards of 4 points dollar-neutral, a market source said.

Limelight stock traded to a high of $6.58 and a low of $6.06 before closing the day at $6.11, a decrease of 8.67%.

LendingTree day two

LendingTree’s 0.5% convertible notes due 2025 were active and continuing to post gains their second day in the secondary space.

The 0.5% notes were changing hands around 104.375 with stock down early in the session, a market source said.

They rose to 105 heading into the afternoon and expanded another 0.5 point dollar-neutral, a market source said.

LendingTree stock traded to a high of $359.28 and a low of $348.22 before closing the day flat at $355.42.

The 0.5% notes also skyrocketed on their aftermarket debut on Wednesday, closing the day with a 4-point dollar-neutral expansion.

Twitter’s earnings

Twitter’s 0.25% convertible notes due 2024 were active and making gains on an outright basis alongside stock following its second-quarter earnings report.

The 0.25% convertible notes rose about 2 points outright to 105.5 with stock up more than 4% late Thursday afternoon.

Twitter stock traded to a high of $40.26 and a low of $37.50 before closing the day at $38.44, an increase of 4.09%.

Twitter reported revenue of $683 million in the second-quarter, which missed analyst expectations for revenue of $705 million.

However, EBITDA of $133 million was better than the expected $109 million, according to a market source.

Twitter also reported a surge in user growth, which was fueling the rise in its stock.

American Airlines results

American Airlines’ 6.5% convertible notes due 2025 were on the rise on an outright basis with stock up following the embattled company’s second-quarter earnings report.

The 6.5% notes were up about 3 points outright to 89 late Thursday afternoon.

American Airlines stock traded to a high of $12.41 and a low of $11.01 before closing the day at $11.78, an increase of 3.7%.

While the company smashed expectations on the top line, it missed on the bottom.

American reported losses per share of $7.82 which was wider than analyst expectations for losses of $7.70.

However, the company reported revenue of $1.62 billion which beat analyst expectations for revenue of $1.44 billion.

The airline also reported that it closed the second-quarter with $10.2 billion in liquidity, reduced its daily cash burn to $30 million from $100 million, and raised another $1.2 billion in a private placement on Thursday, Prospect News reported.

The company announced that its liquidity position should sustain it through a weak recovery and its goal is to be cash positive in 2021 as travel demand increases, Prospect News reported.

Mentioned in this article:

American Airlines Group Inc. Nasdaq: AAL

LendingTree Inc. Nasdaq: TREE

Limelight Networks Inc. Nasdaq: LLNW

Twitter Inc. NYSE: TWTR

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.