Morning Commentary: Carbonite prices new deal, trades above par; WebMD in focus on sale reports

By Stephanie N. Rotondo

Seattle, March 30 – A convertible bond trader said there was “lots of volume” in Carbonite Inc.’s new $125 million issue of 2.5% convertible senior notes due 2022 early Thursday.

The trader saw the deal trading up to 104.

The stock (Nasdaq: CARB), however, was down 17 cents at $19.33 in mid-morning trading.

The deal priced early Thursday, coming with a 32.5% initial conversion premium. The terms came in the middle of price talk for a yield of 2.25% to 2.75% and a conversion premium of 30% to 35%.

Barclays ran the books.

Aside from the new issue, WebMD Health Corp.’s 2.5% convertible notes due 2018 were being eyed, following reports on Wednesday that the company had started the formal process of selling itself.

A trader saw the convertibles trading around 102, which was in line with the few trades seen late Wednesday.

The underlying equity (Nasdaq: WBMD) was 40 cents weaker at $53.39.

In late-afternoon trading on Wednesday, both the convertibles and the common shares had improved in the wake of the sale reports.

The company had said in February that it was looking into its strategic alternatives, including a possible sale. That admission came in connection with the company’s earnings results and updated guidance for the current year.

The latter indicated that the company expected to see slower growth in 2017.

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