Morning Commentary: GT Advanced bonds trade in the 30s; planned Dynegy, Starwood Waypoint eyed

By Rebecca Melvin

New York, Oct. 7 – Convertibles remained weak in general early Tuesday as selling in yield names continued, a New York-based trader said.

GT Advanced Technologies Inc.’s convertible bonds remained active after the stock and bonds collapsed on Monday on news that the Merrimack, N.H.-based solar and LED equipment company filed for Chapter 11 bankruptcy protection.

The GT Advanced bonds were seen as low as 29 and were quoted at both 30 bid, 32 offered and at a 32 bid, 34 offered range.

GT Advanced shares that plunged more than 90% on Monday bounced by more than 60% on Tuesday to about $1.30. But “the stock is up on nothing,” a New York-based trader said.

“A lot of fear from GTAT,” a trader said, adding that the bankruptcy was an isolated event.

Convertibles players were beginning to take a look at two deals pricing after the market close. One trader said he liked them both and that they should do well.

Dynegy Inc. planned to price $400 million of three-year mandatory convertible preferred shares to yield 5.375% to 5.875% with an initial conversion premium of 20% to 25%, and Starwood Waypoint Residential Trust planned to price $150 million of three-year notes to yield 4% to 4.5% with a 20% to 25% premium.

Starwood Waypoint’s existing 3% convertibles, which priced only three months ago, were not heard in trade. That is five-year paper, compared to the new deal’s three-year maturity. Meanwhile, Starwood Waypoint shares were down 2.4%.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.