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Morning Commentary: Lantheus, Marriott Vacations convertibles on deck; demand heavy
By Abigail W. Adams
Portland, Me., Dec. 5 – The convertibles primary market burst into action on Monday after two weeks of no issuance with two sizable offerings on deck.
Lantheus Holdings Inc. plans to price $500 million of five-year convertible notes and Marriott Vacations Worldwide Corp. plans to price $500 million of five-year convertible notes after the market close on Monday.
The deals continued to carry attractive yields, looked cheap based on underwriters’ assumptions, and played to heavy demand, sources said.
“They’re blowouts,” a source said.
As market players eyed the new deals in the works, the secondary space was quiet with on a red morning for equity markets.
There was $75 million in reported volume shortly before 11 a.m. ET with few names seeing concentrated trading activity.
The Dow Jones industrial average was down 204 points, or 0.59%, the S&P 500 index was down 0.87%, the Nasdaq Composite index was down 0.82% and the Russell 2000 index was down 1.77% shortly before 11 a.m. ET.
Lantheus on tap
Lantheus plans to price $500 million of five-year convertible notes after the market close on Monday with price talk for a coupon of 2.625% to 3.125% and an initial conversion premium of 37.5% to 42.5%.
The deal was heard to be in the market with assumptions of a 375 basis points credit spread and a 40% vol., according to a market source.
The deal looked cheap and was playing to heavy demand, a source said.
Marriott eyed
Marriott Vacations plans to price $500 million of five-year convertible notes after the market close on Monday with price talk for a coupon of 3.25% to 3.75% and an initial conversion premium of 27.5% to 32.5%.
The deal was heard to be in the market with assumptions of a 400 bps credit spread and a 35% vol., according to a market source.
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