Older Meritors quiet on news of new $300 million deal; newer iStar notes edge upward

By Rebecca Melvin

New York, Sept. 18 – Meritor Inc.’s two existing convertible issues were quiet early Monday despite news that the Troy, Mich.-based commercial vehicle supplier is pricing $300 million of new 20-year convertibles after the market close on Tuesday.

“Neither one is trading. It’s incredibly slow,” a New York-based trader said of the two older Meritor bonds and the market in general.

Meritor has convertibles due 2026 with a 7.875% coupon and a convertible with a 6.25% coupon.

A second market source said that Meritor is expected to buy back old debt with proceeds of the new deal, so it will be comprised mostly of current holders rolling over into the new bond.

The convertibles primary market is running behind last year’s pace for September, although it is still ahead for the year to date, according to Prospect News’ data.

For September so far, there has been $1.95 billion in five deals, and that compares to $2.88 billion in eight deals for September 2016.

For the year to date, there has been $29.66 billion in 87 deals, compared to $26.20 billion in 58 deals for the same period last year.

iStar Inc.’s 3.125% convertible notes due 2022, $250 million of which debuted in the market on Friday, edged up 0.373 point for a price around the market close at 100.375.

Elsewhere there was some trading of Nabors Industries Ltd.’s convertibles, which were up to around 77.625 compared to 77.25 early in the session.

Meritor launches notes

BNP Paribas Securities Corp. is left lead bookrunner for the new Meritor notes together with the other bookrunners BofA Merrill Lynch, J.P. Morgan Securities LLC, RBC Capital Markets LLC and PNC Capital Markets LLC.

The deal is being sold under Rule 144A deal. Proceeds of the new paper will be used to purchase, redeem or otherwise repay a portion of outstanding debt.

Meritor is a Troy, Mich.-based supplier of drivetrain, mobility, braking and aftermarket solutions for commercial vehicle and industrial markets.

The longer term notes will mature Oct. 15, 2037. The deal was priced at launch with a coupon fixed at 3.25% and a 60% initial conversion premium.

Mentioned in this article:

iStar Inc. NYSE: STAR

Meritor Inc. NYSE: MTOR

Nabors Industries Ltd. NYSE: NBR

© 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.