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Morning Commentary: 3D Systems eyed; MPG Ingredients trades up on debut
By Abigail W. Adams
Portland, Me., Nov. 11 – The convertibles primary and secondary market remained active on Thursday despite the closure of bond markets for the Veteran’s Day holiday.
One deal remained on the forward calendar – 3D Systems Corp.’s $350 million offering of five-year convertible notes.
The deal looked cheap based on underwriters’ assumptions.
Meanwhile, new paper from MGP Ingredients Inc. made its aftermarket debut. The new paper was putting in a strong performance in the aftermarket with the notes up on an outright and dollar-neutral basis.
3D Systems eyed
3D Systems plans to price $350 million of five-year convertible notes after the market close on Thursday with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 35% to 40%, according to a market source.
The deal was in the market with assumptions of 350 bps over Libor and a 42% vol., according to a market source.
Using those assumptions, the deal looked 1.18 points cheap at the midpoint of talk, a source said.
MGP Ingredients prices
MGP Ingredients priced $175 million of convertible notes due 2041 after the market close on Wednesday at par with a 1.875% coupon and an initial conversion premium of 37.5%.
Pricing came toward the cheap end of talk for a coupon of 1.5% to 2% and at the midpoint of talk for an initial conversion premium of 35% to 40%, according to a market source.
The new paper was putting in a strong performance in the aftermarket.
The bonds were changing hands at 102.5 versus a stock price of $69.76 early in the session.
Stock was $70.26, an increase of 0.4%, shortly before 11 a.m. ET.
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