Morning Commentary: New Starwood slips on debut; older Starwood adds; Micron lower on swap

By Rebecca Melvin

New York, March 24 – Starwood Property Trust Inc.’s new 4.375% convertibles due 2023, which priced in an upsized $250 million deal overnight, were trading at par and slightly below in the early going on Friday, according to market sources.

The offer at par was despite higher shares. But Starwood’s older 4.55% convertible due 2018, of which about $230 million of the $600 million outstanding will be repurchased with proceeds of the new deal, were trading actively and higher. Those bonds traded at high as 109 and later at 108.125, which was up from 107.7 on Thursday, according to Trace data.

The common stock of the Greenwich, Conn.-based real estate investment company was up 20 cents, or 0.9%, at $22.73 in early trading.

Elsewhere, Micron Technology Inc.’s 3% bonds jumped on an outright basis, but were lower on swap, after the Boise, Idaho-based semiconductor company reported second-quarter results that bettered expectations.

Micron’s 3% convertibles due 2043 traded up 6 points to 111.5 on an outright basis, and were last around 110 against shares that were up about $2.25, or 8.5%, at $28.72.

The bond was “lower by a point and change,” a New York-based trader said, citing the fact that the bond was rich relative to its capital structure and other convertibles in the space.

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