Upsized Weatherford notes jump on debut; upsized Softbank/Alibaba mandatory lags shares

By Rebecca Melvin

New York, June 2 – Weatherford International Ltd.’s new 5.875% exchangeable traded up strongly in heavy volume Thursday after the international oilfield services company priced an upsized $1.1 billion of the five-year senior notes at terms that were mixed compared to talk, a New York-based trader said.

The new Weatherford convertibles were seen up at 108.375 bid, 108.875 offered near the market close with shares at $5.82. That was wider on a swap basis of about 5 points depending on one’s delta, a trader said.

Also in the primary market, Softbank Group Corp. priced an upsized $5.5 billion of mandatory securities exchangeable into Alibaba Group Holding Ltd. shares. Those securities were seen in the market around par early in the session and were said to have lagged a little on a swap basis as the stock rallied, a second New York-based trader said at the end of the session.

The Alibaba convertibles priced at the cheap end of talked terms for a 5.75% rate and a 17.5% initial exchange premium.

The two super-sized issues accounted for the lion’s share of Thursday’s market action. But Ciena Corp. was a name in focus among established issues after the networking equipment maker posted weaker quarterly earnings that were better than expected. Ciena’s stock surged almost 13%.

Ciena’s 3.75% convertibles jumped to 122.22 from 115.78 previously, according to a pricing source. And the Ciena 4% convertibles rose to 127.68 from about 122.6.

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