Dynegy prices mandatory, gyrates in trading; Par Pacific also comes with a deal; Micron weakens

By Stephanie N. Rotondo

Seattle, June 16 – Two new issues hit the convertible bond market on Thursday.

Dynegy Inc. brought $400 million of tangible equity units due July 1, 2019, pricing the securities after the close on Wednesday with a 7% interest rate and a 23.5% conversion premium.

The deal came within talk for a distribution rate of 6.625% to 7.125% and a conversion premium of 22.5% to 27.5%.

Par Pacific Holdings Inc. meantime priced $100 million of 5% convertible senior notes due 2021 with a 15.16% initial conversion premium before the open on Thursday.

The deal came at the cheap end of talk for a yield of 4.5% to 5% and an initial conversion premium of 15% to 25%.

While a trader said there was “not a peep” in the new Par Pacific issue, he noted that trading in the Dynegy paper was on the busier side.

“Everybody is just trading this Dynegy back and forth,” he said.

Following pricing, the units traded as low as 99 and as high as 100.25 early in the day. The trader said the securities were trending closer to par as the stock bounced up. Towards the end of the day, the issue was seen “modestly over par” at 100.34.

The equity underlying the issue was off 27 cents, or 1.67%, at $15.88 at mid-morning. However, it improved a bit, ending down just a dime at $16.03.

The units hold a prepaid stock purchase contract and a senior amortizing note. Upon maturity – July 1, 2019, unless settled earlier at the holder’s option or the company’s election in connection with an acquisition termination redemption – holders will receive between 5.0201 and 6.1996 shares of common stock per purchase contract.

As for the Par Pacific deal, the initial conversion rate is 55.5556 common shares per each $1,000 of notes, equal to an initial conversion price of $18.00 per share. That places the initial conversion premium at 15.16%, in line with the 15% to 25% talk.

That equity was trading at $15.55, down 8 cents.

Micron retreats

Micron Technology Inc.’s 3% convertible notes due 2043 “traded a ton,” a trader said Thursday.

He saw the bonds falling 1.5 points to 70.75. The stock meantime dropped 7 cents to $11.95.

At the Nasdaq 34th Investor Conference Call, Micron’s Chief Financial Officer, Ernie Maddock, sought to assure investors that the company’s planned acquisition of Inotera Memories – a joint venture project of the company located in Taiwan – was progressing, though the closing of the transaction has been delayed.

“We just can’t get across the finish line during that time,” Maddock said in the call, referring to the initial timeline projecting a mid-July close.

“There were some things that are a part of the transaction that need to be completed that simply can’t be done by that period of time. And we will provide an update on the transaction further toward the end of this calendar year. But I can tell you based on the number of questions that I’ve been asked, the delay is not related to the ability of Micron to obtain financing.”

Maddock further noted that the issues related to the transaction that could not be completed on time were more on the part of Inotera than of Micron.

On May 25, the Boise-based semiconductor producer said the acquisition should go as originally planned. However, on June 8, the company said that hitting the mid-July closing date was “not possible.”

Mentioned in this article:

Dynegy Inc. NYSE: DYN

Micron Technology Inc. Nasdaq: MU

Par Pacific Holdings Inc. NYSE: PARR

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.