Scorpio Tankers, Dominion launch deals; $950 million supply eyed Tuesday; Web.com expands

By Rebecca Melvin

New York, June 24 –Another new deal launched in the convertibles market early Tuesday, bringing the tally of new paper to price after the market close to $950 million in three deals, while a fourth deal launched after the market close for $900 million to price late Wednesday.

Monaco-based oil tanker company Scorpio Tankers Inc. launched an offering of $250 million of five-year convertible senior notes early Tuesday that one New York-based trader said looks “decent.”

Scorpio Tankers joined California network-security company Palo Alto Networks Inc.’s $500 million offering of five-year convertible senior notes and Latin America’s online commerce host MercadoLibre Inc.’s $300 million offering of five-year convertible senior notes for pricing after the market close.

After the market close, Dominion Resources Inc. launched a $900 million offering of three-year mandatory convertible equity units that was expected to price after the market close on Wednesday.

One name that did better on a hedged basis was Web.com Group Inc.’s 1% convertibles due 2018, which slid about 13 points against a 20% plunge in the underlying shares of the Jacksonville, Fla.-based global domain name register. The shares tanked on news that Google is entering the domain registration business with an invitation only beta website.

On a dollar-neutral, or hedged, basis the bonds expanded by about 0.5%, assuming a 70% delta, a New York-based trader said.

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