New MercadoLibre, Scorpio Tankers expand 2 points plus on hedge; Palo Alto better on debut

By Rebecca Melvin

New York, June 25 – The convertibles market’s three new deals all added on an outright basis and expanded on a dollar-neutral, or hedged, basis on their debuts in secondary dealings on Wednesday, market sources said.

MercadoLibre Inc.’s newly priced 2.25% convertibles due 2019 traded up to as high as 103.5 bid, 104.5 offered versus an underlying share price of $90.25 and expanded on a dollar-neutral, or hedged, basis, by as much as 3.25 points after the Latin American e-commerce company priced $300 million of the senior notes at the tight end of talk, market sources said.

The new MercadoLibre bond pulled back slightly from those levels to end the day 102 bid, 102.5 offered, representing a 2-point expansion dollar neutral, a syndicate source said.

Scorpio Tankers Inc.’s new 2.375% convertibles due 2019 traded up to 103.625 bid, 104.125 offered versus an underlying share price of $9.65 and also expanded on a dollar-neutral basis.

Palo Alto Networks Inc.’s newly priced $500 million of 0% five-year convertibles traded up to as high as 100.75 bid, 101 offered versus a share price of $78.55 in the early going and expanded on a dollar-neutral basis after the network security company priced the senior notes at the rich end of talk late Tuesday.

The new Palo Alto 0% bonds were quoted at 101 bid, 101.5 offered at the end of the session versus the closing stock price of $79.75.

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