New National Health trades around par; YY extends losses; Genco adds with coupon payment

By Rebecca Melvin

New York, March 20 - National Health Investors Inc.'s newly priced 3.25% convertibles traded actively on Thursday at both slightly below and slightly above par after the Murfreesboro, Tenn.-based health care real estate investment trust priced $175 million of the seven-year convertibles at terms that were mixed compared to talk.

The new National Health issue was seen last at 99.75 bid or 99.875 bid, 100.625 offered, and was a primary focus of the trading session. National Health shares ended at $60.21, which was up $0.37, or 0.6%.

YY Inc.'s 2.25% convertibles due 2019, which debuted on Wednesday, extended their losses in active trading, ending down at around 97 and contracting about 0.25 point on a dollar-neutral basis, amid lower levels for the company's shares, according to a market source.

Genco Shipping & Trading Ltd.'s 5% convertibles due 2015 rose 3 or 4 points to about 70 bid after the New York-based dry bulk shipping company made a late coupon payment on those notes, the company said in an 8-K filing. But Genco shares slid nearly 23%.

Overall, trading action was centered around new and recent issues. Thursday's new deal debut of National Health followed five new issues, which put in mixed debuts, Wednesday, amid mostly lower stocks.

Equities on Thursday rebounded after encouraging economic data outweighed concerns about interest rates potentially rising sooner than expected. The labor market data on Thursday showed the number of Americans filing for jobless benefits was near a three-month low last week The Conference Board said its index of leading indicators increased 0.5% for February following a slight 0.1% rise in January. And the Federal Reserve Bank of Philadelphia said manufacturing in the Mid-Atlantic rebounded in March as new orders increased to 9.0 in March from negative 6.3 in February.

The Dow Jones Industrial Average rose 108.88 points, or 0.7%, to 16331.05; the S&P 500 gained 11.24 points, or 0.6%, to 1872.01; and the Nasdaq Composite Index tacked on 11.68 points, or 0.3%, to 4319.29.

On Wednesday, equities sank on the last Federal Reserve policy statement that indicated it might begin raising interest rates in about a year.

National Health around par

National Health's newly priced 3.25% convertibles were quoted last at 99.875 bid, 100.625 offered against the closing share price of $60.21, according to a syndicate source.

National Health's stock edged higher by 0.6%.

Earlier the new convertibles were quoted at 100 bid, 100.5 offered with the underlying shares at $60.15, according to a second syndicate source. But the bonds also printed lower at 99.5.

The health care REIT priced $175 million of the seven-year convertibles with an initial conversion premium of 20%.

Pricing for the registered deal came at the rich end of 3.25% to 3.75% coupon talk and at the midpoint of 17.5% to 22.5% premium talk.

Joint bookrunners were BofA Merrill Lynch and J.P. Morgan Securities LLC.

The notes are non-callable for life with no puts. There is a change-of-control make-whole delivered upon conversion as additional shares. The bonds also have dividend protection.

Conversion settlement will be in cash, shares or a combination of cash and shares.

Proceeds are expected to be used to reduce amounts outstanding under the company's revolving credit facility and for general working capital purposes.

YY extends losses

YY's 2.25% convertibles due 2019 were seen last at 97, which was down from 99 at the end of Wednesday.

"It traded down with shares," a market source said, and contracted about 0.25 point on a dollar-neutral, or hedged, basis.

YY's shares fell $2.67, or 3.35%, to $77.02 on Thursday. The deal priced when the stock was at $82.00.

"That's what happens with a stock like this; people hammer it," the market source said.

The Guangzhou, China-based online music, entertainment and gaming company priced $400 million of the five-year senior notes with a 2.25% coupon and a 35% premium, which was the cheap end of talked terms.

Genco adds on coupon payment

Genco's 5% convertibles due 2015 were seen at 70 bid at the end of Thursday, according to a trader, which was higher by about 3 or 4 points on the day.

Shares of the New York-based drybulk shipping company fell 37 cents, or nearly 23%, to $.124.

The convertibles rose after the company made a $3.1 million coupon payment on the convertible. The payment was originally due on Feb. 18.

"It's interesting," a trader said. "There were rumors they were going to file for bankruptcy."

Those rumors could still prove true, as the company said in the regulatory filing that it was continuing talks with creditors regarding a potential restructuring.

The trader said the bonds "haven't traded much," though he believed they went out 70 bid.

The stock was "very active," however, the trader said.

When the shipping company announced that it missed the coupon payment last month and struck a waiver of default with term loan lenders, it said continuing weakness in charter rates and debt obligations required it to use the 30-day grace period to review its financing options and consider restructuring alternatives.

Stephanie Rotondo contributed to this report

Mentioned in this article:

Genco Shipping & Trading Ltd. NYSE: GNK

National Health Investors Inc. NYSE: NHI

YY Inc. NYSE: YY

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