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Morning Commentary: World Wrestling’s new issue does well post-pricing; Zillow holds its ground
By Stephanie N. Rotondo
Seattle, Dec. 13 – A new issue from World Wrestling Entertainment Inc. was taking up a majority of the activity in early convertible debt trading on Tuesday.
The WWE brought $200 million of 3.375% convertible senior notes due 2023, upsizing from $175 million.
The initial conversion premium is 25%.
Initial price talk was for a yield of 3.25% to 3.5% and a premium of 25%.
At mid-morning, a trader said the new deal made up about $62 million of the day’s $130 million in trading volume.
“Half the volume is in one bond,” he remarked.
He said the issue was trading in a 100.5 to 100.875 context.
While the paper was doing well post-pricing, the underlying stock (NYSE: WWE) was not.
The equity was down $1.06, or 5.35%, at $18.85 at mid-morning.
J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Citigroup Global Markets Inc. ran the books.
As for last week’s new deals, they were quieting down a bit after taking up the bulk of trading for the last several sessions.
A trader saw Zillow Group Inc.’s 2% convertible senior notes due 2021 at 102.5 bid, 103 offered.
“That’s about where they were yesterday,” he noted.
However, the underlying class C common shares (Nasdaq: ZG) were finally trading upward, ticking up 28 cents to $37.02.
The deal came Wednesday.
Zillow announced on Monday that its greenshoe had been exercised. The $60 million over-allotment option was exercised in full, bringing total issuance to $460 million.
Zillow also said that it had used $370.2 million of the proceeds from the offering to privately repurchase the Trulia LLC-linked 2.75% convertible notes due 2020.
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