Morning Commentary: Greenbrier convertibles price rich, come upsized; AMD pops post-earnings

By Stephanie N. Rotondo

Seattle, Feb. 1 – The convertible bond market didn’t have to search for things to do on Wednesday, as the Greenbrier Cos. Inc. brought a new deal and Advanced Micro Devices Inc. reported quarterly results.

Greenbrier said it sold $250 million of 2.875% convertible senior notes due 2024 with an initial conversion premium of 37.5%.

The deal was upsized from $175 million. The yield priced richer than the 3.25% to 3.75% talk. The conversion premium also came richer than the 30% to 35% talk.

Goldman Sachs & Co. and BofA Merrill Lynch ran the books.

Post-pricing, the convertibles were pushing above par to 102.5, one sellside source reported.

The underlying stock (NYSE: GBX) was rebounding from Tuesday’s lows, rising 78 cents, or 1.77%, to $44.53.

As for AMD, its 2.125% convertible notes due 2026 were jumping in early dealings.

A market source saw the issue opening in a 152 to 153 context, which was up 3 to 4 points from Tuesday’s close. By mid-morning, the paper was trading all the way up to a 163 handle.

The company’s shares (Nasdaq: AMD) were also faring better, firming $1.21, or 11.69%, to $11.58.

The Sunnyvale, Calif.-based semiconductor company posted its fourth-quarter results late Tuesday, showing a loss of 4 cents per share on revenue of $1.11 billion.

The bottom line was consistent with estimates forecast by Zacks Consensus Estimate, and revenues beat expectations of $1.07 billion.

However, the company issued guidance for the first quarter that was not all that impressive.

For the current quarter, AMD expects revenue to fall 11% sequentially, mainly because of seasonal weakness.

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