Market awaits new deals from Hercules, Liberty; Nabors in focus; Finisar convertibles firm

By Stephanie N. Rotondo

Seattle, Jan. 19 – A convertible bond trader said Thursday that there was “no noise yet” on two new issues that are slated to price after the session’s close.

Neither issue had priced as of press time.

Early Thursday, Liberty Media Corp. announced its plans to offer $350 million of cash convertible senior notes due 2023. The notes were talked with a 1% to 1.5% yield and an initial conversion premium of 27.5% to 32.5%.

Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, UBS Securities LLC and BofA Merrill Lynch are running the books.

Hercules Capital Inc. said late Wednesday that it was selling $150 million of five-year convertible senior notes, with the yield talked at 4.25% to 4.5% and an initial conversion premium of 12.5% to 17.5% (expected ratings: BBB-/BBB+).

Jefferies LLC is running the Rule 144A deal.

But it wasn’t only the primary that was quiet, according to the trader. He said that at mid-morning, only $69 million of convertible bonds had traded. That compared to $83 million that had traded by the same time on Wednesday.

“It’s all about Trump,” he said. “Everyone is just waiting to see” what the president-elect will do come Inauguration Day and thereafter.

As for the day’s secondary dealings, Nabors Industries Inc.’s $575 million of 0.75% exchangeable senior unsecured notes due 2024 continued to be active.

A market source said the paper finished straddling 104, which was unchanged from the previous day.

The name made up about $15 million of the early volume, a trader said, seeing the paper holding around the 104 level.

The stock was up 13 cents at $17.51.

The deal came Jan. 10 with an initial conversion premium of 40%. The company – a unit of Nabors Industries Ltd. – initially sold $500 million of the notes. A $75 million greenshoe was fully exercised on Jan. 13.

Citigroup Global Markets Inc. and Goldman Sachs & Co. were the bookrunners.

Finisar Corp. was another busy name, according to sources.

At one desk, the 0.5% convertible notes due 2036 were said to hit highs around 103, though the paper eventually closed closer to 101.875. The 0.5% convertible notes due 2033 were then pegged at 119.875, a gain of 4 points on the day.

Another source saw the 2036 maturity with a 119 handle, up over 3 points. The 2033 paper was also deemed up over 3 points, trading around 102.5.

The company’s stock improved as well, rising $2.07, or 7.18%, to $30.89.

Immunomedics Inc.’s 4.75% convertible notes due 2020 meanwhile continued their upward climb.

A source saw the issue adding over 3 points outright, ending just south of 107.

The equity also firmed, gaining 29 cents, or 6.95%, to close at $4.46.

Mentioned in this article:

Finisar Corp. Nasdaq: FNSR

Hercules Capital Inc. NYSE: HTGC

Immunomedics Inc. Nasdaq: IMMU

Liberty Media Corp. Nasdaq: LMCK

Nabors Industries Ltd. NYSE: NBR

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