Morning Commentary: Spirit Airlines convertibles hit the aftermarket, expand on debut

By Abigail W. Adams

Portland, Me., April 29 – The second and most likely final new deal of the week hit the secondary space on Thursday.

Spirit Airlines Inc. priced $440 million of five-year convertible notes on Wednesday at par with a coupon of 1% and an initial conversion premium of 40%.

Pricing came at the rich end of talk for a coupon of 1% to 1.5% and the midpoint of talk for an initial conversion premium of 37.5% to 42.5%, according to a market source.

The new paper was in focus in the secondary space and trading up on an outright and dollar-neutral, or hedged, basis.

The new paper was changing hands between 102.25 and 103.25 in heavy volume early in the session.

Spirit Airlines’ stock was trading at $35.74, an increase of 1.97% from Wednesday’s close, shortly before 11 a.m. ET.

Concurrently, the company priced 10,594,073 shares of common stock at an offering price of $35.05 per share.

Proceeds from the convertible notes offering were used to repurchase $146.8 million of the company’s 4.75% convertible notes for $440.7 million in cash.

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