Samsung Electronics brings surprise CB

A secondary market convertible by the DRAM giant has been re-packaged for the public markets, in a bid to take advantage of high-implied volatility.

Jackie Horne

March 27, 2001

With Morgan Stanley Dean Witter again acting as lead manager, a privately placed convertible issued as part of a supply contract has returned to the public markets after the expiration of a one-year lock-up. The only difference is that while last November's $200 million transaction came from Dell, this March's $100 million deal (on a nominal basis) has come from Apple.

With all terms fixed at the original launch, the lead's only manoeuvrability has derived from the prospective issue price, which was marketed under a 117% to 119.3% range and priced at the very top. At this level, it came above the deal's 109.432% redemption price, giving the issue a negative yield to maturity of 3.7%.

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