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Morning Commentary: Aphria prices cheap, trades at par; Aqua America trades up on debut
By Abigail W. Adams
Portland, Me., April 18 – The convertibles primary market priced $900 million over two deals after the market close on Wednesday with one deal coming cheap and another deal downsized but pricing rich.
While one deal was making gains in active trading in the secondary space, the other was hovering at par early in Thursday’s session.
Aphria Inc. priced $300 million of five-year convertible notes after the market close on Wednesday at par with a coupon of 5.25% and an initial conversion premium of 20%, according to a company news release.
The notes priced on the cheap end of talk for a coupon of 4.75% to 5.25% and an initial conversion premium of 20% to 25%, according to a market source.
The notes were hovering at par early in Thursday’s session.
While up pre-market, Aphria stock traded down to $7.64, a decrease of 2.3%, shortly before 11 a.m. ET.
Aqua America, Inc. priced a downsized $600 million, or 12 million units, of $50-par three-year tangible equity units after the market close on Wednesday at the rich end of talk with a dividend of 6% and a threshold appreciation premium of 22.5%.
Price talk was for a dividend of 6% to 6.5% and a threshold appreciation price of 17.5% to 22.5%, according to a market source.
The units were making gains in active trading in the secondary space.
They traded as high as $52 early in the session with more than $4 million of the units on the tape.
The units priced concurrently with an upsized $1,124,999,992 common stock offering, which priced at $34.62 per share.
Aqua America stock was $36.78, an increase of 5.63%, shortly before 11 a.m. ET.
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