Greenbrier prices rich, comes upsized; AMD pops post-earnings; Dish Network trades higher

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, Advanced Micro Devices Inc. reported quarterly results and Dish Network Corp. announced an asset exchange.

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 came richer than the 3.25% to 3.75% talk, and the conversion premium also came richer than the 30% to 35% talk.

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

As for AMD, its 2.125% convertible notes due 2026 were jumping in the wake of its earnings announcement, which was essentially in line with expectations.

Dish paper was meantime also gaining ground as the satellite television provider said it was swapping assets with EchoStar Corp., its sister company.

The convertibles gained 3 points outright, while the equity ticked up more than 3%.

Greenbrier pushes above par

Greenbrier brought $250 million of 2.875% convertible notes on Wednesday and appeared to be well received.

At the end of the day, the notes were seen around 104. Earlier in the day, the convertibles were trading above par at 102.5, one sellside source reported.

The underlying stock rebounded from Tuesday’s lows, rising $1.05, or 2.4%, to $44.80.

The Rule 144A deal includes a $25 million over-allotment option, which was downsized from $26.25 million.

The conversion rate is 16.6234 shares per each $1,000 of notes, equal to a conversion price of $60.16 per share.

The notes are contingently convertible prior to Nov. 1, 2023 but can be converted any time after that date ahead of maturity.

Proceeds will be used for general corporate purposes, including working capital, capital expenditures, acquisitions of or investments in complementary businesses and products or repayment or repurchase of a portion of debt.

Greenbrier is a Lake Oswego, Ore.-based supplier of equipment and services to the freight rail transportation markets.

AMD gets a boost

AMD’s 2.125% convertibles jumped more than 16 points in midweek trading following the company’s quarterly results.

A source pegged the issue at 166 at the close, up from levels around 149.5.

At another desk, a trader saw the issue opening in a 152 to 153 context in early dealings, 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 were also faring better, firming $1.69, or 16.3%, to $12.06.

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.

Currently, AMD has $1.4 billion of debt, with cash and equivalents of $1.2 billion. But given the company’s weak EBITDA, leverage is calculated at over 5x.

Dish on the rise

Dish Network announced an asset exchange with a sister company on Wednesday. Its 3.375% convertible notes due 2026 added 2 to 3 points on the news.

One source pegged the convertibles at 119.5, up from 116.5.

At mid-morning, a trader saw the issue at 118.625, a gain of about 2 points.

The stock meantime improved $1.97, or 3.33%, to $61.14.

Under the deal with EchoStar, Dish will take over EchoStar’s assets and operations, including EchoStar Technologies’ hardware and software technology development group, set-top box development and satellite uplink and fiber-optic backhaul for its transmissions.

Dish will also acquire EchoStar’s 10% stake in Sling TV.

In return, EchoStar will take over the 80% economic interest in Hughes Retail Group.

The transaction will ultimately remove EchoStar from the TV hardware and software development arena.

Because of the structure of the deal, the transaction is tax free.

Mentioned in this article:

Advanced Micro Devices Inc. Nasdaq: AMD

Dish Network Corp. Nasdaq: DISH

The Greenbrier Cos. Inc. NYSE: GBX

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