Red Hat, NXP Semiconductors improve; U.S. Steel gains; Medicines, Resource Capital on tap

By Rebecca Melvin

New York, Jan. 6 – Red Hat Inc. and NXP Semiconductors NV were slightly better Tuesday as segments of the convertibles market remained the beneficiary of lower share prices resulting from turbulence created by further cratering of oil prices and macroeconomic concerns.

Red Hat’s 0.25% convertibles, which priced Oct. 1, were seen at 118.875 versus an underlying share price of $68.33 early Tuesday, a New York-based trader said.

NXP Semiconductors’ convertibles were quoted at 101.25 versus an underlying share price of $73.89, a second trader said.

United States Steel Corp. was another notable name as its convertibles were said to have gained about 1.5 points in the past two days. One trader said that the 1.5-point gain was on a hedged basis, and a second trader said it was not.

Separately, the Medicines Co. launched $300 million of seven-year convertible bonds that were talked to yield 2.5% to 3% with an initial conversion premium of 32.5% to 37.5%.

Joint bookrunners are Goldman Sachs & Co., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC.

The issuer is a Parsippany, N.J.-based developer of products that improve specialized care.

Also launching after the market close Tuesday was Resource Capital Corp. with a $100 million offering of five-year convertible senior notes that were talked to yield 7% to 7.5% with an initial conversion premium of 10% to 15%.

The registered deal was being sold via joint bookrunning managers Morgan Stanley & Co. LLC and JPMorgan.

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