Morning Commentary: TCP Capital prices upsized deal; two convertible issues launch in Europe

By Rebecca Melvin

New York, Aug. 31 – There was a new deal in the U.S. convertibles market and two deals that launched in the European convertibles market on Wednesday.

TCP Capital Corp. priced an upsized $125 million of 5.5-year convertibles ahead of the market open on Wednesday to yield 4.625% with an initial conversion premium of 10%. The Santa Monica, Calif.-based specialty finance company’s deal was favorably eyed because of its higher credit quality and the hefty coupon, but the premium was frowned upon by one market source.

In Europe, Inmarsat plc launched an offering of about $550 million of seven-year convertible bonds that were talked to yield 3.625% to 4.125% with an initial conversion premium of 30% to 35%, and Remy Cointreau SA has launched an offering of €275 million of 10-year bonds convertible into new or existing shares, or Oceanes, that were being talked to yield 0% to 0.25% and with an initial conversion premium of 35% to 45%.

The market activity in Europe was not seen as pointing to a reopening of the primary market in the United States, however.

“I don’t know that there’s any correlation between Europe and here when it comes to pricing convertibles,” a New York-based trader said.

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