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Primary calendar adds convertibles from Hess; LVMH, KemPharm price; Newmont bonds improve
By Stephanie N. Rotondo
Seattle, Feb. 4 – The convertible debt market saw one new deal added to the calendar on Thursday.
Hess Corp. said it planned to sell $500 million of series A mandatory convertible preferred stock, a deal being done concurrently with an underwritten public offering of common stock.
Goldman Sachs & Co. is running the books.
The $50-par preferreds automatically convert to common shares on Feb. 1, 2019.
Additionally, KemPharm Inc. brought $75 million of 5.5% convertible notes due 2021 via a Rule 144A offering. The notes are convertible into common stock at the holder’s option at an initial conversion rate of 58.4454 shares per each $1,000 of notes.
The initial conversion price represents a 15.37% premium over Wednesday’s closing share price of $14.83.
In Europe, there was a $600 million offering of 0% non-dilutive cash-settled convertible bonds due 2021 from LVMH, the Paris-based maker of spirits like Dom Perignon and Moet.
The deal was initially slated to be $500 million but was soon increased.
The $250-par bonds are priced at 103, at the rich end of talk of par to 103. The deal came at a yield of negative 0.59% with a 37.5% initial conversion premium. That was also the rich end of talk, which was set for a yield of between minus 0.59% and 0% and an initial conversion premium of 32.5% to 37.5%.
Proceeds are for general corporate purposes.
In the secondary, Newmont Mining Corp.’s 1.625% convertible notes due 2017 were trading actively and better.
One trader said the paper was up over a point, trading around 101. He noted that parity was 53.
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