Morning Commentary: Golar LNG’s new issue trades over par post-pricing; Microchip remains in play

By Stephanie N. Rotondo

Seattle, Feb. 14 – The convertible bond market had a new issue hit the tape early Tuesday, as Golar LNG Ltd. priced $350 million of five-year convertible senior notes.

The issue came with a 2.75% yield and an initial conversion premium of 35%. The terms were in the middle of the 2.5% to 3% yield talk, as well as the 32.5% to 37.5% premium talk.

ABG Sundal Collier, BofA Merrill Lynch, Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC ran the books.

Investors seemed to like the new deal, according to a trader. He saw the convertibles trading in a 102 to 102.25 range in early dealings.

“There hasn’t been much” in terms of new issues in the last few weeks, he noted.

The company’s shares (Nasdaq: GLNG), however, were down 71 cents, or 2.54%, to $27.21.

Aside from Golar, the market continued to push around Microchip Technology Inc.’s 1.625% convertible notes due 2027, a $1.8 billion issue that priced Friday.

The company also sold $500 million of 2.25% convertible notes due 2037, but the 1.625% paper has received the bulk of the attention.

A trader saw the 1.625% convertibles in a 100.125 to 100.25 context, which he said was “in like a quarter-point, no big deal.”

Microchip’s equity (Nasdaq: MCHP) was rebounding from Monday’s lows, trading up 59 cents to $71.25.

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