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Morning Commentary: New Mountain Finance add-on on tap; JPMorgan Voya-linked notes active
By Abigail W. Adams
Portland, Me., June 4 – While the convertibles primary market has only one deal on deck, there are whispers about the forward calendar beginning to heat up.
New Mountain Finance Corp. plans to price a $50 million add-on to its 5.75% convertible notes due 2023 after the market close on Tuesday with a reoffer price of 100.25 to 100.75, according to a 497AD filing with the Securities and Exchange Commission.
Initial talk was for a reoffer price of 100.75 to 101.25, according to a market source.
However, with the initial size of the deal $115 million, the add-on will raise the principal amount by almost 50%, warranting a greater discount on the reoffer price, a source said.
The 5.75% convertible notes are a non-liquid issue held by only a few buyers. The notes have not traded since May 20. They were last quoted around 102, a source said.
The add-on was most likely the result of a reverse inquiry with someone looking to increase their position in the name, a source said.
With the volatility in capital markets, real estate investment trusts and business development companies have seen better buyers with investors looking for stable yields, sources said.
Meanwhile, the secondary space saw decent volume early in Tuesday’s session with more than $89 million in reported volume about one hour into the session, a market source said.
JPMorgan Chase Financial Co. LLC’s 0.25% cash-settled equity-linked notes due 2023 tied to Voya Financial, Inc. were the most active issue early in the session with almost $14 million in reported volume.
The 0.25% notes were changing hands at 99.375, according to a market source.
Voya stock was $53.24, an increase of 3.04%, shortly before 11 a.m. ET.
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