Airlines and cruises lag on vaccine trial halt; Tiffany equity down on busted LVMH merger; Lyft converts gain on volume recovery—Mid-Day Commentary

Major airlines and cruise operator stocks moved down this morning after drugmaker AstraZeneca paused global trials of its COVID-19 vaccine candidate when a study participant came down with an unexplained illness.

The trials will be on hold while an independent committee reviews safety data. Meanwhile, shares of competing vaccine developers NovavaxModernaInovio and BioNTech were lifted by the news.

Novavax traded up as high as 6% to USD 90.55 per share this morning before settling at a 2.95% gain, at USD 87.83 per share and a market cap of USD 5.384bn. Moderna’s shares traded up 3.15% this morning, to USD 56.05 per share and a market cap of USD 22.07bn.

Inovio’s shares jumped 19.8% this morning to USD 11.54 per share before settling at USD 10.44 per share for a market cap of USD 1.76bn, up 8.64% from yesterday’s close. BioNTech’s shares traded today at USD 62.24 per share and a market cap of USD 14.84bn, up 4.04% from yesterday’s close.

On the airline front, Delta Air Lines moved down 2.27% on the day to USD 31.80 per share and a market cap of USD 20.28bn. American Airlines traded off 4.10% on the day to USD 13.07 per share and a market cap of USD 6.59bn. Shares of United Airlines moved down 3.97% to USD 35.80 per share and a market cap of USD 10.435bn.

As far as cruise lines go, Carnival Corp’s shares traded at USD 17.74 per share and a market cap of USD 14.732bn, down 3.01% from yesterday’s close. Norwegian Cruise Line traded off 3.39% to USD 17.90 per share with a market cap of USD 4.93bn. Royal Caribbean’s shares moved down 2.38% on the day to USD 69.81 per share and a market cap of USD 14.98bn.

GTT Communications‘ loans and bonds soared over the last two days amid media reports that the company is nearing a deal to sell European fiber assets to Macquarie Group, 3i Group and AustralianSuper. The consortium could buy the assets for more than USD 2bn.

GTT’s USD 1.77bn Libor+ 275bps term loan due 2025 jumped to the 88.107/91.25 context yesterday from trades at 78.76/81.144 on Monday (7 September), according to Markit. The loans strengthened today to the 88.705/91 context.

The company’s USD 575m 7.875% senior unsecured notes due 2024 jumped to trades at 50 yesterday (8 September) after the news came out, from trades at 36.25 on 28 August, according to MarketAxess. The notes last traded today at 50.5.

As part of an amendment to its credit agreement negotiated with lenders last month, GTT agreed that after proceeds from EMEA asset sales are applied to its EMEA term loans, it will use the remaining proceeds to repay the US term loans.

Tiffany & Co’s stock traded down this morning after French luxury goods group LVMH said it would not buy the New York City-based luxury jewelry and specialty retailer in the time frame that the two had originally agreed upon. In response, Tiffany has filed a lawsuit against LVMH to enforce the merger agreement. LVMH entered into an agreement to acquire Tiffany for roughly USD 16.2bn (USD 135 per share) last year.

The Board of LVMH cited a letter from the French European and Foreign Affairs Minister as well as Tiffany’s request to extend the “outside date” in the merger agreement to 31 December from 24 November as some of the elements behind this decision.

The letter from the French government directed the company to delay the acquisition until after 6 January 2021 in response to the US government’s threat of taxes on French products.

Common shares of Tiffany traded down 8.34% from yesterday’s close, to USD 111.65 with a USD 13.5bn market cap.

Lyft’s debt traded up yesterday evening after the ride-share company provided a business update. The borrower noted that its trips rose 7.3% in August compared to July with operations in Canada recovering faster than in the US. However, rides for last month were still down 53% year-over-year.

Management also mentioned that Lyft used a lower amount of driver incentives than originally anticipated last month as more drivers returned to the platform improving the supply conditions.

And if the driver incentives spend remains at August levels for this month, Lyft expects that the YoY change in revenue will modestly outperform the YoY change in rideshare rides for the quarter.

Its USD 747.5m 1.5% convertible notes due 2025 traded up to change hands at 109.875 yesterday evening compared to 106.783 on 4 September. However, its equity edged down 1.1% to USD 29.79 per share and a USD 9.3bn market cap.

2020 Debtwire

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