Wintrust holds up amid lower shares; Evergreen active; UBS-Stillwater exchangeable on tap

By Rebecca Melvin

New York, Dec. 7 - Wintrust Financial Corp.'s newly priced 7.5% tangible equity units held up on their debut Tuesday, trading at 50.20 bid, 50.50 offered compared to their 50 par for much of the session despite a slide in the underlying common shares.

"There were below-par bids, but I don't think it traded down there," a New York-based sellsider said of the Wintrust $200 million convertible deal plus common equity offering that launched late Monday and priced ahead of the open Tuesday. The deal was initially expected to price after the close of markets.

Evergreen Solar Inc.'s 4% convertibles traded in size on Tuesday and were higher albeit still at distressed levels after the Marlboro, Mass.-based maker of solar power panels announced late Monday a comprehensive recapitalization plan that includes exchanging the existing convertibles.

Elsewhere, trading was humdrum, market players said, with the lion's share of light volume taken up by large, liquid issues like Amgen Inc. and EMC Corp., with no significant price changes.

But one notable name was Stanley Black & Decker Inc. Its convertible floaters traded at 111.5. The newer Black & Decker 4.75% preferred shares weren't heard in trade, but a market in that issue was 105.5 bid, 105.75 offered.

Convertibles were mostly better early on as equity futures pointed higher and translated to an early rally on enthusiasm over the deal president Barack Obama and Republican leaders notched to extend Bush-era tax cuts that had been due to expire at the end of the year.

In addition to tax cuts, the package includes an extension of unemployment benefits.

The early rally faded, however, to end in mixed stocks, and likewise convertibles saw their early bid up with the stocks fade.

"The tone is better; volume is not that good. But better stocks helps the mood," a New York-based sellside trader said.

"There is not a lot going on just trading old stuff back and forth. It's fairly quiet," the sellsider said.

Back in the primary market, UBS AG was on tap to price its mandatory exchangeable based on Stillwater Mining Co. common shares.

The Stillwater exchangeables were not seen as a credit play because the deal is being conducted outside the company, based on UBS' ability to pay the interest.

"It's not the company's risk, so I didn't look at it," a Connecticut-based sellside analyst said.

Wintrust holds up

Wintrust Financial's newly priced 7.5% tangible equity units traded mostly at 50.20 bid, 50.5 offered.

Shares of the Lake Forest, Ill., financial holding company fell $2.88, or 9%, to $29.35. The shares were pretty steady throughout the session but weakened slightly into the close.

"Nobody cares," a New York-based sellsider said of the offering that he said was launched and priced too quickly to generate much enthusiasm on the Street.

The Wintrust convertibles priced near the cheap end of talk for the dividend and at the midpoint of talk for the initial conversion premium. The new paper was talked with a dividend of 7.125% to 7.625% and an initial conversion premium of 22.5% to 27.5%.

"There was nothing exciting going on," the trader said, adding that it has to do with the end of the year and players wanting to hold on to the gains they have notched for the year to date.

The Wintrust offering was sold via bookrunner Bank of America Merrill Lynch, with co-managers RBC Capital Markets, Sandler O'Neill + Partners LP and Wells Fargo Securities.

Wintrust also sold a common stock add-on offering via joint bookrunners Bank of America Merrill Lynch and Sandler O'Neill for nearly $100 million of proceeds, based on shares at $30 a piece.

Evergreen Solar adds a little

Evergreen Solar's 4% convertibles, of which a large part is subject to an exchange offer, traded in round lots at 41.75 bid, 42.25 offered, which was up from pricing in the upper 30s prior to the solar company's restructuring announcement.

The issue has been pretty quiet of late, so the activity on Tuesday was notable, a sellsider said.

"This is a distressed situation," the sellsider said.

In addition to the Evergreen Solar 4% convertibles, the Evergreen 13% convertibles, which priced earlier this year, were seen steady at around 79 bid, 80 offered.

The company announced that it is going to issue new 7.25% convertibles in exchange for the 13% paper.

The restructuring plan includes exchange offers for its existing 4% convertible senior notes and 7.5% convertible senior notes, implementing a 1-for-6 reverse stock split previously approved by stockholders in July, and increasing the company's authorized shares of common stock to 240 million from 120 million.

Lazard Capital Markets LLC is serving as the dealer manager for the exchange offers and the bookrunner for the new money offering.

Evergreen plans to hold a special meeting of stockholders in early 2011 to get support for the plan.

Mentioned in this article:

Amgen Inc. Nasdaq: AMGN

EMC Corp. NYSE: EMC

Evergreen Solar Inc. Nasdaq: ESLR

Stanley Black & Decker NYSE: SWK

Stillwater Mining Co. NYSE: SWC

SWS Group Inc. NYSE: SWS

Wintrust Financial Corp. Nasdaq: WTFC

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