RTI issues expand on swap on Alcoa takeout; Starwood trades better; Actavis at 101.5-102

By Rebecca Melvin

New York, March 9 – RTI International Metals Inc. was a primary focus in the convertibles market on Monday as the stock of the Pittsburgh-based producer of titanium mill products surged 40% on news that it is being taken over by Alcoa Inc.

The M&A-induced spike caused RTI’s two convertible bonds to jump on an outright basis – action was largely focused on the longer-dated RTI 1.625% convertibles – and they were unhurt on a dollar-neutral, or hedged, basis, a New York-based trader said, “because the premium was big enough.”

Alcoa’s 5.375% mandatory convertible preferreds slipped $1.65, or 3.5%, at $45.00, compared to Alcoa’s common shares, which fell 78 cents, or 5.4%, to $13.70, on the day.

In other M&A news, Simon Property Group Inc. offered to buy fellow mall-REIT Macerich Co. for $16 billion in cash and stock, but the news didn’t stir other convertibles in the REIT space, traders said.

Starwood Property Trust Inc. traded a little bit, one New York-based trader said. The Starwood 3.75% convertibles due 2017 traded at 103.34, which was up 0.156 point on the day, and the Starwood 4% convertibles due 2019 changed hands at 112.3, which was up 2 points.

Meanwhile, the mega, $4.6 billion mandatory issue from Actavis plc, which priced Feb. 24, has remained a feature of trade since it priced, and they were last seen at 101.5 bid, 102 offered with the underlying shares at $290.00.

© 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.