Downsized Starwood edges up from discount; Salix flat to lower; Red Hat extends gains

By Rebecca Melvin

New York, Oct. 3 – Starwood Property Trust, Inc.’s newly priced 3.75% convertibles traded up from their discounted reoffered price Friday but were still below par after the Greenwich, Conn.-based commercial and real estate finance company priced a reduced version of a planned dual-tranche deal launched Thursday.

The new Starwood convertibles due 2017 were trading at 99.5 around midmorning with the underlying shares higher by about 1%, a New York-based trader said.

Starwood priced $375 million of the three-year notes and skipped a second tranche of five-year notes that were talked for a combined $500 million deal.

Starwood’s existing 4% convertibles due 2019 traded a 106.79 early Friday, according to Trace data. That was up from lows notched Thursday at around 104.7 but below 109 where it was trading before the deal was announced.

Elsewhere, Salix Pharmaceuticals Ltd.’s 1.5% convertibles were essentially flat after news that the Raleigh, N.C.-based drug company scuttled a planned merger with Italy’s Cosmo Pharmaceuticals SpA following new Treasury Department rules aimed at cracking down on so-called inversion deals.

Red Hat Inc.’s 0.25% convertibles, which debuted in the market Thursday, traded higher at 103.3 versus a share price of $59.06 during the session, a New York-based trader said. Toward the end of the day it was quoted at 102.25 with shares at about $58.50.

The paper was up 0.5 point dollar neutral from issue, assuming a 55% delta, a syndicate source said.

© 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.