Morning Commentary: Stanley Black & Decker mandatory ‘trades well’; Cytokinetics drags

By Rebecca Melvin

New York, Nov. 8 – Stanley Black & Decker Inc.’s newly priced 5.25% mandatory convertible lifted on its trading debut on Friday after the New Britain, Conn.-based maker of hand and power tools priced $675 million of the three-year paper at mixed terms compared to talk.

The new Stanley Black & Decker mandatory was quoted at 102 bid, 102.5 offered, with the common stock at about $157.45.

The deal is “trading well,” a New York-based market source said, adding that it was well received by the market because it is a rated, registered, listed entity that investors have owned in the past, and given the fact that the issuer is a well-known brand name. “It checks all the boxes.”

Pricing of the Stanley Black & Decker paper came at mixed terms compared to revised talk, or at the rich end of 5.25% to 5.5% dividend talk and the cheap end of 20% to 25% premium talk. The deal was initially talked at 5.5% to 6% dividend and 15% to 20% threshold appreciation premium.

The newly priced and upsized Cytokinetics Inc. convertible dragged below par on its debut in market trading on Friday as the underlying shares extended losses after a 19% plunge on Thursday.

The new Cytokinetics 4% notes traded with a 99 handle after the South San Francisco, Calif.-based biopharmaceutical company priced an upsized $120 million of the seven-year notes.

Originally, the Securities and Exchange Commission-registered deal was expected to be $100 million in size. The notes priced at par with an initial conversion premium of 27.5%.

Shares fell to below $8.00 on Friday from around $11.00 before the convertible deal was announced.

In trading among the established secondary market, the 0.75% convertibles of LivePerson Inc. tanked in tandem with a slide in the underlying shares of the developer of conversational commerce and AI software.

Shares of the New York-based company sank $6.65, or 16.5%, to $33.76 as the LivePerson convertibles due 2024 dropped nearly 12 points to 115.35, according to Trace data.

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