Morning Commentary: Granite Point prices wide, Cleveland-Cliff active around par

By Abigail W. Adams

Portland, Me., Dec. 7 – Granite Point Mortgage Trust Inc. priced $125 million in convertible notes due 2022 before the market open at the wide end of talk.

The deal came with a coupon of 5.625% and a fixed $20 conversion price.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and BofA Merrill Lynch were the joint bookrunners for the Rule 144A deal, which carries a greenshoe of $18.75 million.

Price talk had been for a coupon of 5.375% to 5.625% and a fixed $20 conversion price, according to a market source.

The deal was “over the wall,” according to a market source. “I don’t expect to see much trading of it.”

Granite Point stock was down 0.11% in early trading Thursday to $17.62.

Meanwhile, Cleveland-Cliffs Inc. recently issued 1.5% convertible notes due 2025 continued to be actively traded on their second day on the market but eased a little from Wednesday’s levels.

The notes dipped just below par in early trades but quickly jumped to trade above par by a fraction of a point, according to Trace data. Cleveland-Cliffs stock was up 0.99% to $16.50 in early trades.

The notes made their secondary market debut on Wednesday solidifying around 100.5 in active trading.

Cleveland-Cliffs was the first to issue new paper in December but it may not be the last.

“A number of things may be popping up,” before the month is over, a syndicate source said.

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