SunEdison weaker; Abengoa seeks creditor protection; Total prices $1.2 billion convertible

By Rebecca Melvin

New York, Nov. 25 – SunEdison Inc.’s convertibles were quoted lower but thinly traded on Wednesday as the overall U.S. convertibles market quieted ahead of the Thanksgiving holiday.

U.S. financial markets will be closed on Thursday and will have abbreviated trading sessions on Friday.

SunEdison’s convertibles were down with lower shares, which were hurt by a downgrade to “sell” from “neutral” by UBS Research, which also cut its price target for the solar company to $2.00 from $3.00.

Shares fell 21%, although for much of the session they were down about 16% after having spiked 37% on Tuesday.

Meanwhile, news that Spain’s Abengoa SA renewable energy and engineering firm started insolvency proceedings also contributed to negative sentiment for SunEdison, a New York-based trader said.

SunEdison’s 6.75% mandatory preferred convertibles were indicated down to 236 to 237 from 279.

Abengoa shares fell up to 70% on Wednesday. Abengoa has several convertible bond issues, including a 5.125% exchangeable note that priced earlier this year and which matures in 2017.

In the primary arena, France’s Total SA launched and priced $1.2 billion of seven-year convertible bonds at the cheap end of talked terms to yield 0.5% with an initial conversion premium of 20%.

Total priced its Regulation S bonds together with call options, which is similar to pricing a bond with a call spread, except without the warrant transactions. The all-in cost is still cheaper than straight debt, a syndicate source said.

© 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.