Three deals launch early in primary; fourth deal follows after the close; secondary quiet

By Rebecca Melvin

New York, Nov. 17 – Three new deals launched in the U.S. convertibles market early Monday, including two mandatory deals and a $75 million issue of five-year senior notes. After the market close, a fourth new deal was launched.

The early deals were all fairly small and didn’t create much of a stir among market players.

“They are all small and probably won’t trade very much,” a New York-based trader said.

Two of the three were in the homebuilder sector, but they weren’t seen influencing action in that sector in the secondary market.

“They really didn’t serve as catalysts,” the trader said.

The Woodlands, Texas-based homebuilder LGI Homes Inc. was expected to price $75 million of five-year convertible notes late Monday to yield 3.75% to 4.25% with an initial conversion premium of 30% to 35%.

Louisville, Ky.-based Kindred Healthcare Inc. planned to price $150 million of mandatory convertibles after the market close on Tuesday. That company is a provider of post-acute care services.

Newport Beach, Calif.-based homebuilder William Lyon Homes was expected to price $100 million of mandatory convertibles after the market close on Wednesday to yield 7% to 7.5% with an initial conversion premium 17.5% to 22.5%.

After the market close, Mill Valley, Calif.-based Redwood Trust Inc. launched a deal for $200 million of five-year exchangeable senior notes that were talked to yield 5.25% to 5.75% with an initial conversion premium of 17.5% to 22.5%.

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