Morning Commentary: New RH 0% convertibles edge up in trade; older RH little changed

By Rebecca Melvin

New York, Sept. 13 – The new RH 0% convertibles were trading early Friday at 100.25 bid, 101 offered with the stock little changed at $169.12. according to a New York-based market source.

The notes, which came with a 25% premium, had been talked at a 0% coupon and 25% to 30% initial conversion premium on Thursday.

RH is formerly Restoration Hardware, and it has existing convertible debt that came at similar pricing. The RH 0% convertible bonds due 2023 bounced around in early trade but were last little changed at 108.125, according to Trace data. The bonds had also printed with a 106 handle on Friday.

The proceeds of the new convertible will be used to retire the Corte Madera, Calif.-based home furnishings company’s $200 million outstanding second-lien debt and reduce borrowings under its credit facility.

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