China Lodging convertibles move up strongly in debut trading; Intel sees heavy volume

By Rebecca Melvin

New York, Oct. 27 – China Lodging Group Ltd.’s newly priced 0.375% convertible notes traded up strongly out of the chute on Friday after the Shanghai-based hotel group priced $425 million of the five-year notes beyond the tight end of coupon talk and at the tight end of premium talk, according to a market source.

The new China Lodging notes were seen wrapped around 101.75 against the closing share price of $130.18, representing at 1.5 point to 1.75 point gain on a dollar-neutral, or hedged, basis.

By the market close, the shares of the Shanghai-based multi-brand hotel group were 26 cents higher at $130.44.

There was also follow-on action in the Weibo Corp. 1.25% convertibles that debuted on Thursday, with those notes trading steady at 103.5. Shares of the Beijing-based social media company climbed a bit into the end of the session, closing up 93 cents, or 1%, to $90.89.

But the lion’s share of convertibles market action on Friday was in Intel Corp. after the chip maker posted strong earnings and raised guidance.

The Intel 3.25% convertibles due 2039 saw extremely high volume with $102.5 million of bonds changing hands by midday, according to Trace data. The price of the equity sensitive 3.25% Intel bonds surged 13.8 points to 209.3.

The Intel 3.493% convertibles due 2039 rose 9 points to 151 on strong volume of $82.4 million of bonds.

Intel shares popped $3.05, or 7.4%, to $44.40, marking a 17-year high.

The company reported earnings of $1.01 a share, which was much higher than the 80 cents per share expected by analysts. Intel also raised its full-year earnings forecast to $3.25 a share on revenue of $62 billion. Analysts has been expecting annual revenue of $3.01 a share on revenue of $61.39 billion.

Intel reported 7% revenue growth year over year in its unit that sells chips for servers driving internet companies. Its division selling personal computer chips was unchanged from a year earlier.

Moving in the opposite direction was the Tesla Inc. 2.375% convertibles, which fell 13 points to 106.75. The drop came in tandem with a drop in the Tesla shares, which have reached correction territory after hitting a high last month.

Shares of the Palo Alto, Calif.-based electric car maker fell 2% on Friday after reports that production of its Model 3 electric car would be delayed.

Mentioned in this article:

China Lodging Group Ltd. Nasdaq: ADR: HTHT

Intel Corp. Nasdaq: INTC

Tesla Inc. Nasdaq: TSLA

Weibo Corp. Nasdaq: ADR: WB

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