Three deals on tap; Acorda looks slightly cheap; Restoration Hardware looks slightly rich

By Rebecca Melvin

New York, June 17 – Market players sized up three new deals in the U.S. convertibles market on Tuesday, of which two were expected to price after the market close Tuesday and one was expected to price after the market close Wednesday.

All three deals – which altogether amount to about $900 million in proceeds, including over-allotment options – were being well received, sources said.

Pricing late Tuesday, Acorda Therapeutics Inc.’s $300 million of seven-year convertible senior notes were viewed as slightly cheap at the midpoint of talk, which was for a 1.75% to 2.25% coupon and 27.5% to 32.5% premium. Acorda shares got hammered during the session, ending down 9%.

Also pricing Tuesday, EZCorp Inc.’s $175 million offering of five-year convertible notes was also viewed as cheap at a talked 2.25% to 2.75% coupon and 30% to 35% premium.

The EZCorp deal was seen at par bid in the gray market but was expected to do better than that upon release for secondary dealings.

Pricing late Wednesday, Restoration Hardware Holdings Inc.’s $300 million deal of five-year convertible senior notes was also turning heads, but it was viewed as slightly rich, using a 325 bps credit spread and 35% vol., which got the deal worth 99.2 at the midpoint of 0% to 0.5% coupon talk and 30% to 35% premium talk, according to a Connecticut-based trader.

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