Harmonic trades flat after pricing wide; planned SunPower looks cheap: SunEdison unchanged

By Rebecca Melvin

New York, Dec. 9 – Harmonic Inc.’s newly priced 4% convertibles traded around 100 to 100.5 on Wednesday, which was about flat on swap, after the San Jose, Calif.-based video infrastructure company priced $125 million of the five-year senior notes beyond the cheap end of initial talk for a 2.75% to 3.25% coupon and 37.5% to 42.5% premium.

Meanwhile, Switzerland’s Basilea Pharmaceutica Ltd. priced CHF 200 million of 2022 convertible senior bonds – which was the high end of the deal size – at the tight end of talked terms for a 2.75% coupon and 30% initial conversion premium.

“This was a biotech that got priced at the rich end,” a trader said.

Also in the primary space, SunPower Corp. was expected to price $350 million of seven-year convertible senior debentures after the market close. That deal were seen to be worth about 102.5 at the midpoint of price talk, using a credit spread of 600 basis points over Libor and 35% vol., according to a Connecticut-based trader.

The deal was also valued with a borrow cost of minus 1.5%.

The SunPower convertibles were talked to yield 3.5% to 4% with an initial conversion premium of 32.5% to 37.5%.

Back in established issues, SunEdison Inc. announced a restructured agreement to acquire Vivint Solar Inc., which initially sent the SunEdison convertibles about a point or two higher, but then they pulled back to about the unchanged mark, a New York-based trader said.

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