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Morning Commentary: Wayfair adds to calendar; Teva improves as new CEO named
By Stephanie N. Rotondo
Seattle, Sept. 11 – As the new trading week got underway, Wayfair Inc. added a new issue to the convertible bond calendar.
The Boston-based home goods retailer announced early Monday that it was selling $300 million of convertible senior notes due 2022 via a Rule 144A offering.
Pricing is expected following Monday’s close.
Goldman Sachs & Co. and Citigroup Global Markets Inc. are leading the deal.
The new convertibles will mark the company’s first time tapping that market.
In response to news of the offering, Wayfair’s shares (NYSE: W) were off 62 cents at $76.61 at mid-morning.
The issue is contingently convertible prior to June 1, 2022 and convertible at anytime thereafter.
The company can redeem the issue on or after Sept. 8, 2020, assuming the underlying stock hits a 130% price hurdle.
The convertibles are putable in certain circumstances.
A portion of the deal’s proceeds will be used to cover capped call transactions. The remaining funds will be used for working capital and general corporate purposes.
Meanwhile, Teva Pharmaceutical Industries Ltd.’s 0.25% convertible notes due 2026 were on the rise after the company announced it had named a new chief executive officer, following a prolonged search.
A market source pegged the paper just north of 90. That compared to levels around 88.75 on Friday.
The company’s underlying stock (NYSE: TEVA) was well up in early dealings, adding $3.12, or 20.10%, to $18.62.
The Israel-based pharmaceutical company announced Monday that it had hired Kare Schultz as president and CEO.
Schultz will replace Yitzhak Peterburg, who has been interim CEO since Erez Vigodman departed the post in February.
Previously, Schultz was president and CEO of H. Lundbeck A/S, which he helmed as the company was facing the loss of critical patents. He was also the former chief operating officer of Novo Nordisk A/S.
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