Morning Commentary: DryShips drops after straight deal pulled; SunEdison trades with shares lower

By Rebecca Melvin

New York, Oct. 14 – DryShips Inc.’s 5% convertibles due Dec. 1, 2014 were dropping hard in active trade early Tuesday after the Athens-based drybulk shipping company said it has withdrawn its planned $700 million offering of three-year senior secured notes and has instead agreed on a $350 million bridge facility to help fund the upcoming maturity of the 5% convertible senior notes.

The DryShips convertibles dropped several points from Monday’s close to below 90. Early last week the bonds traded at 100.

DryShips blamed “current market conditions” for the decision not to go ahead with the high-yield bond sale.

The news was followed by downgrades from Deutsche Bank and Imperial Capital.

Also in trade early Tuesday were SunEdison Inc.’s newer convertible, a 0.25% senior note due 2020, which changed hands early Tuesday at 82.5, and its older 2.75% convertibles due 2021, which changed hands at 114.6, according to Trace data.

The bonds were trading in tandem with lower shares that slid in the early going on news that the St. Peters, Mo.-based semiconductor and solar technology company is doubling its letter-of-credit facility to $800 million from $400 million.

SunEdison shares slid to as low as $13.09 before popping back up to $14.12, which was down 1.3% in intra-day trading.

The SunEdison convertibles have contracted on a hedged basis in recent weeks, but it was not immediately known how the SunEdison convertibles were doing early Tuesday on a hedged basis.

© 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.