Morning Commentary: First Majestic convertible notes offering on tap; Sea active

By Abigail W. Adams

Portland, Me., Nov. 29 – The convertibles primary market had one offering on deck as equity markets attempted a rebound from Black Friday, which saw each major index drop by over 2%.

First Majestic Silver Corp. plans to price $200 million of five-year convertible notes after the market close on Monday with price talk for a coupon of 0.125% to 0.625% and an initial conversion premium of 32.5% to 37.5%.

The deal was being marketed with assumptions of 450 basis points over Libor and a 45% vol.

Using those assumptions, the deal looked 3.25 points cheap at the midpoint of talk, a source said.

Another source saw the deal about 1.5 points cheap at the midpoint of talk.

The offering is the latest refinancing deal to come to market.

Proceeds will be used to repurchase the company’s 1.875% convertible notes due 2023 in privately negotiated transactions.

The company intends to call the remaining amount outstanding after the privately negotiated repurchases.

First Majestic’s 1.875% convertible notes were changing hands at 150.5 in early November, according to Trace data.

Meanwhile, the secondary space was active early Monday with equity markets mixed as the market digested the latest threat from the Omicron Covid-19 variant.

The Dow Jones industrial average was up 44 points, or 0.13%, the S&P 500 index was up 0.8% and the Nasdaq Composite was up 1.22%. However, the Russell 2000 index was down 0.51% shortly before 11 a.m. ET.

There was $130 million in reported volume a little over one hour into Monday’s session.

Sea Ltd.’s 0.25% convertible notes due 2026 were among the most actively traded issues early in the session as equity popped before coming in alongside the overall market.

The 0.25% convertible notes were changing hands at 98.5 versus an equity price of $305.82.

There was $9 million in reported volume.

Sea’s American Depositary Shares traded as high as $307.86 shortly after the opening bell before falling into negative territory.

The ADSs were trading at $295.79, a decrease of 0.35%, shortly before 11 a.m. ET.

© 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.