PAR Technology on tap; Ctrip.com in focus on potential new offering; Aerojet expands

By Abigail W. Adams

Portland, Me., April 9 – While convertibles primary market activity has slowed in the run up to the earnings season blackout period, one deal launched after the market close on Tuesday.

PAR Technology Corp. plans to price $60 million of five-year convertible notes after the market close on Wednesday with price talk for a coupon of 4.25% to 4.75% and an initial conversion premium of 30% to 35%, according to a market source.

Jefferies & Co. is bookrunner for the Rule 144A offering, which carries a greenshoe of $10 million.

Meanwhile, despite no new paper entering the secondary space on Tuesday, there was an uptick of trading activity on news of a potential new offering from Ctrip.com International Ltd.

Ctrip.com’s three tranches of convertible bonds were in focus after news broke that the company was discussing a potential new convertible notes offering.

While two of the tranches were largely unchanged, Ctrip.com’s 1.99% convertible notes due 2025 were contracting on the news.

Aerojet Rocketdyne Holdings Inc.’s 2.25% convertible notes due 2023 expanded as stock dropped almost 10% in intraday trading due to a short-seller’s report.

Euronet Worldwide Inc.’s 0.75% convertible notes due 2049 remained major volume movers in the secondary space with the notes continuing to climb on an outright basis.

Ctrip.com in focus

Ctrip.com’s convertible notes were in focus in the secondary space as news surfaced the Shanghai-based online travel services company was considering a new offering of convertible notes.

“Fourth time’s a charm,” a market source said.

Ctrip.com is a repeat issuer of convertible notes with three tranches outstanding.

While two of the tranches were largely unchanged on the news, one tranche saw a large contraction.

The company’s 1% convertible notes due 2020 were active but trading mostly inline on news of the potential new deal, sources said.

The 1% convertible notes were changing hands just shy of 103 on Tuesday.

About $16 million of the bonds were on the tape by the late afternoon.

The 1.25% convertible notes due 2022 were changing hands just shy of 102 early in the session. They were trading at 102.125 later in the afternoon.

About $5 million of the bonds had changed hands by the late afternoon.

While the 1.99% convertible notes due 2025 were the least active of the tranches, they saw the largest dollar-neutral contraction.

The 1.99% notes were trading around 114.375. They were contracted 1.375 points dollar-neutral, a market source said.

Ctrip.com’s American Depositary Shares closed Tuesday at $45.36, a decrease of 1.41%.

Bloomberg reported on Tuesday that Ctrip.com was considering raising up to $800 million in new convertible bonds in a deal that could surface before the end of the month.

Aerojet expands

Aerojet Rocketdyne’s 2.25% convertible notes due 2023 expanded on Tuesday as stock tanked in intraday trading after the release of a short-seller’s report.

The 2.25% convertible notes traded down about 2 points outright to 141 by the late afternoon.

The notes were expanded 0.75 point dollar-neutral, a market source said.

Aerojet stock was down as much as 10% early in the session but rebounded into the afternoon. Stock traded to a low of $30.11 but closed the day at $33.54, a decrease of 1.44%.

Stock took a hit on Tuesday after short-seller Spruce Point Capital released a report claiming Aerojet stock could fall between 40% and 60% once investors have a clearer understanding of the company’s financials.

The report claims the company has used “aggressive accounting” practices to mask its true situation.

The rocket maker is also facing increased competition from Blue Origin and SpaceX, which hasn’t been fully priced into the stock, the report claimed.

Euronet active

Euronet Worldwide’s 0.75% convertible notes due 2049 once again saw high volume activity in the secondary space on Tuesday.

The 0.75% notes traded up to 110.375 on Tuesday. More than $25 million of the bonds were on the tape by the late afternoon.

Euronet stock closed Tuesday at $143.82, an increase of 0.22%.

The investment-grade notes have been major volume movers since they hit the secondary space on March 14.

Mentioned in this article:

Aerojet Rocketdyne Holdings Inc. NYSE: AJRD

Ctrip.com International Ltd. Nasdaq: CTRP

Euronet Worldwide Inc. Nasdaq: EEFT

PAR Technology Corp. NYSE: PAR

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