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Morning Commentary: II-VI’s new 0.25% five-year notes remain active but give in a little
By Stephanie N. Rotondo
Seattle, Aug. 25 – II-VI Co.’s new $300 million issue of 0.25% convertible senior notes due 2022 continued to be actively traded early Friday, after pricing late Wednesday.
But while the notes had popped 4 points upon entering the secondary on Thursday, they were giving back a little on Friday.
A trader said the debt was off slightly over half a point at 104.631.
The trader noted that the issue made up about $10 million of the total volume of $47 million at mid-morning.
The underlying stock (Nasdaq: IIVI), however, continued to push up, adding 5 cents in mid-morning dealings to trade at $35.40.
The deal came via BofA Merrill Lynch and priced with a 33.5% initial conversion premium.
The Rule 144A bonds priced at the tight end of 0.25% to 0.75% coupon talk and toward the tight end of 30% to 35% talk for the initial conversion premium.
The bonds are non-callable and have contingent conversion and net-share settlement.
About $50 million of the proceeds will be used to repurchase stock from one or more of the initial purchasers of the notes via privately negotiated transactions. Remaining proceeds will be used for general corporate purposes, which may include repayment, redemption or refinancing of debt, capital expenditures, investments in or loans to subsidiaries and joint ventures, funding of possible acquisitions or strategic transactions, working capital, satisfaction of other obligations and additional repurchases of II-VI’s outstanding equity securities.
The Pittsburgh-based company is a producer of engineered materials and optoelectronic components and devices.
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