Weibo, China Lodging trade actively; Chart deal eyed; outrights sell Intel into strength

By Rebecca Melvin

New York, Oct. 31 – U.S. convertibles players were both sellers and buyers of paper on Tuesday heading into month end, with trading focused on company-specific trading and contributing to a trick-or-treat tone for the Halloween session.

Recent new issues were active, with a new deal expected to be priced by Chart Industries Inc., while outright players sold Intel Corp. into share strength.

“I didn’t notice any broader trends; most of it was company specific situations,” a New York-based market source said.

Two new issues that priced last week continued to trade actively. At the market close, Weibo Corp.’s 1.25% convertibles due 2022 were straddling 104.5 on an outright basis, with the American Depositary Shares of the Beijing-based social media company having added $2.78, or 3%, on the day to $92.65.

The Weibo paper was trading on outright buyers and hedged sellers, the source said.

Weibo priced $800 million of the five-year notes that debuted in the market last Thursday, and accounted for about half the day’s volume that day.

A second China-based company, China Lodging Group Ltd., also priced a deal last week and the $425 million deal saw good two-way flow on Tuesday.

The China Lodging 0.375% convertibles were seen in the 102 to 103 area at the close versus shares at $133.89, which was up $5.23, or 4.1%, on the day.

China Lodging is a Shanghai-based multi-brand hotel group.

October ended up with another treat for a market in need of paper. Chart Industries was managing to squeeze in a deal before the calendar flips to November, with pricing of the $225 million deal expected after the close.

A source said that the deal had not been upsized by Prospect News’ deadline and pricing was seen “OK” at the midpoint of talk, which was for a 1.25% coupon and 32.5% premium.

But even though pricing was not seen as particularly appealing, it was expected that the deal would trade higher after the break on Wednesday given the lack of new paper in the market recently, the trader said.

Chart’s Rule 144A notes, a portion of which will be used to buy back Chart’s existing convertible issue, were being sold via joint bookrunners Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC and co-manager Raymond James.

Meanwhile outright players were selling into the strength of Intel.

Intel shares rose $1.12, or 2.5%, to $45.49 on Tuesday. The stock is up 22% on the year compared to the 15% gain in the S&P 500 stock index.

There was also trading of DISH Network Corp.’s convertibles and outright buyers of Advanced Micro Devices Inc., buying recent stock weakness, a source said.

Month end was giving way to potentially market moving news later this week as the Federal Open Market Committee meeting underway wraps up on Wednesday and ahead of a widely anticipated pick for new Fed chairman expected to be announced by president Donald Trump on Thursday.

Mentioned in this article:

Chart Industries Inc. Nasdaq: GTLS

China Lodging Group Ltd. Nasdaq: ADR: HTHT

Intel Corp. Nasdaq: INTC

Weibo Corp. Nasdaq: ADS: WB

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