Twitter’s $1.3 billion offering around issue in gray market; WellPoint drops; Tesla slips

By Rebecca Melvin

New York, Sept. 11 – Twitter Inc.’s $1.3 billion convertibles offering was seen at 99.875 bid, 100.125 offered in the gray market on Thursday ahead of final terms expected to be set after the market close.

“They were bid at issue less 0.125 point and offered par plus 0.125 point, so basically wrapped around issue,” a New York-based trader said of both Twitter tranches.

A second source said the two Twitter tranches for $650 million each of five-year and seven-year paper looked about fair value at the midpoint of talk, using 200 basis points to 250 bps over Libor and a 40% vol.

Back in the secondary market, paper was described as heavy, marked by selling that has persisted all week.

One notable loser was WellPoint Inc.’s 2.75% convertible due 2042, which has lost 0.25 point to 0.375 point over the last two days. Shares of the health care benefits company ended little changed for the same period.

Tesla Motors Inc.’s convertibles were also weaker on Thursday, with the Tesla A and B tranches “in” about 0.25 point on the day and 0.5 point for the week. Acorda Therapeutics Inc. was also seen to have contracted by about a point. But Yandex NV was seen lower outright, but better on a dollar-neutral, or hedged, basis by about 0.125 point.

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