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Morning Commentary: Navistar convertibles in play post-earnings; Liberty, Carrefour add to calendar
By Stephanie N. Rotondo
Seattle, June 7 – While trading volume remained limited in the convertible bond market early Wednesday, Navistar International Corp.’s 4.75% convertible notes due 2019 were being eyed.
A market source saw the issue inching up about 0.25 point, even as the stock (NYSE: NAV) declined nearly a point in mid-morning trading.
The source placed the convertibles around 99.25.
The movement in the name came in the wake of the company’s quarterly loss due to lower truck sales in the United States and Canada, as well as a $60 million charge related to used truck inventories.
Meanwhile, the calendar was also in focus, as market players waited for Liberty Expedia Holdings Inc. to price a $350 million Rule 144A offering of senior debentures exchangeable for Expedia Inc. stock.
The deal was announced late Tuesday, and pricing was expected after Wednesday’s close.
Price talk is for a yield of 1% to 1.5% and an initial conversion premium of 27.5% to 32.5%, a market source reported.
BofA Merrill Lynch, J.P. Morgan Securities LLC and UBS Securities LLC are the joint bookrunners.
Ahead of pricing, Liberty’s stock (Nasdaq: LEXEA) was slightly off.
Carrefour also added a deal to the pipeline, a $500 million offering of 0% non-dilutive cash-settled convertible bonds due 2023.
The company said the new $200,000-par debt would be issued at 97.75% to 100% of its par value, with an initial conversion premium of 20%. While final terms are expected late in the session, the share reference price, the initial conversion price and the initial conversion ratio will be determined on June 20.
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