Black Hills mandatory convertible trades ‘in line’ on swap; SunEdison onslaught ongoing

By Rebecca Melvin

New York, Nov. 18 – Black Hills Corp.’s newly priced 7.5% mandatory convertible ended its first day of trading Wednesday just slightly up from par and in line with the underlying common shares 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 syndicate source said.

The Black Hills 7.5% mandatory ended at $50 bid, $50.5 offered versus the underlying shares’ close at $40.48, which was up 0.6%.

The new Black Hills convertible was “holding up and seeing decent interest,” a second syndicate source said.

Pain continued to be felt in SunEdison Inc., which has been sliding for more than a week. The stock was volatile on Wednesday, swinging between gains and losses, after taking a big hit on Tuesday, and the convertibles were consistently weaker.

The SunEdison 2% convertibles that mature in 2018 fell further to 42.5 early Wednesday, though it recouped some ground intraday to about 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.

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