After an active fourth quarter of 2013 that seemed to announce the renaissance of new convertible-bond issuance, 2014 has been something of a dud. The new Tesla deals got a lot of attention and deservedly so, but the company unsurprisingly squeezed full value from buyers (and essentially top-ticked the stock), so the bonds have languished several points below their issue prices. But Tesla’s new bonds have been a home run compared with the other big issue of 2014, from Herbalife, whose very existence may be in jeopardy if Bill Ackman is proven right. The Herbalife bonds, currently quoted in the 80 - 85 cents on the dollar range, have fallen almost as much as the stock.
|