Morning Commentary: New Black Hills trades ‘OK’; SunEdison onslaught ongoing; SouFun quiet

By Rebecca Melvin

New York, Nov. 18 – Black Hills Corp.’s newly priced 7.5% mandatory convertibles were trading around par on Wednesday after the vertically integrated energy company priced $260 million of the three-year equity units at the midpoint and cheap end of talked terms, a New York-based trader said.

The Black Hills 7.5% mandatories were seen right around their $50 par versus $40.25, which was Tuesday’s closing share price.

Black Hills also priced about $221.4 million of common stock, or 5.5 million shares at $40.25 each.

On Wednesday, Black Hills shares were up a bit from that level, and seen last higher by 24 cents, or 0.6%, at $40.49.

The new Black Hills convertible was “holding up and seeing decent interest,” the trader said.

Pain continued to be felt in SunEdison Inc., which has been sliding for more than a week. The stock was actually a bit higher on Wednesday after taking a hit on Tuesday, but at least some of the bonds were weaker.

The SunEdison 2% convertibles that mature in 2018 fell further to 42.5 early Wednesday before recouping to 45 and compared to 47 on Tuesday.

On Monday, the SunEdison 2% convertibles were 56, and on Oct. 29 they were 81.

“People, in general, are trying to stay away from the name or get flat,” a trader said of the SunEdison convertibles.

SunEdison shares were last at $3.26, which was up 7% on the day.

SouFun Holdings Ltd.’s 2% convertibles due 2018 traded little changed at 95.875 early Wednesday, according to Trace data.

Shares were down about 5% after the Beijing-based real estate internet company reported a larger -than-expected third-quarter loss but reaffirmed full-year revenue guidance.

SouFun’s adjusted quarterly loss of 8 cents per American Depositary Share, was down from profit of 16 cents per ADS in the year-earlier period. Revenue rose 30% from the year-earlier period to $248.5 million.

Analysts had expected earnings of 3 cents per share on revenue of $248.45 million.

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