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Morning Commentary: Turning Point convertibles upsized, expand on debut; Twitter eyed
By Abigail W. Adams
Portland, Me., July 26 – New paper was again the focus of the convertibles secondary space on Friday with one new deal hitting the market.
Turning Point Brands, Inc. priced an upsized $150 million of five-year convertible notes after the market close on Thursday at par with a coupon of 2.5% and an initial conversion premium of 30%.
Pricing came at the cheap end of talk for a coupon of 2% to 2.5% and at the midpoint of talk for an initial conversion premium of 27.5% to 32.5%, according to a market source.
The greenshoe was also upsized to $22.5 million.
The initial size of the deal was $125 million with a greenshoe of $18.75 million.
The new paper was performing well in the secondary space.
The notes traded as high as 102.5 shortly after the opening bell but were largely wrapped around 102 with stock unchanged, a market source said.
The majority of trading activity was outright accounts. However, there were some swap trades on the tape, the source said.
Turning Point Brands stock was $41.45, an increase of 0.05%, shortly before 11 a.m. ET.
Outside of the new paper, Twitter Inc.’s 0.25% convertible notes due 2024 were active with the notes making large gains on an outright basis and slightly expanded dollar-neutral as stock soared after an earnings beat.
The 0.25% notes were up 4.5 points outright to 105.75. The notes were expanded about 0.25 point dollar-neutral, a market source said.
Twitter stock was $41.92, an increase of 9.96%, shortly before 11 a.m. ET.
Twitter reported earnings of 20 cents per share on revenue of $841 million versus the 19 cents expected on revenue of $829.1 million, CNBC reported.
The social networking platform also reported a 14% year-over-year increase in active users.
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