Planned Starwood Waypoint ‘okay’ ahead of pricing; Sprit Realty unchanged, Spectranetics adds on hedge

By Rebecca Melvin

New York, June 30 – Starwood Waypoint Residential Trust launched a deal for same-day pricing Monday that was viewed as just “okay” in terms of cheapness from an investor’s perspective, a New York-based trader said.

The Oakland, Calif.-based real estate investment trust’s deal was expected to generate limited interest due to its rather small deal size of $150 million and due to the fact that it is a REIT stock which is new, with low volatility likely.

Starwood Waypoint “looks okay at best,” the trader said.

Among established issues, the longer-dated convertibles of Scottsdale, Ariz.-based REIT Spirit Realty Capital Inc. changed hands at 100.125, which was down about 0.25 point on an outright basis, but unchanged on a dollar-neutral basis, against a stock price that was lower by 8 cents, or 0.7%, at $11.27.

Spirit Realty priced $747.5 million of convertibles in two tranches in May.

Elsewhere Spectranetics Corp.’s 2.625% convertibles traded down nearly 0.5 point on an outright basis, but were higher on a dollar-neutral basis, as swap buyers stepped in on a dip in the underlying shares, a New York-based trader said.

Otherwise, market action was muted as the session represented the last day of the quarter and month and the beginning of a holiday-shortened week.

“The market was kind of flat; equities were ‘in a little,’ and it was pretty quiet,” a New York-based trader said.

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