Unisys, CSG Systems gain outright, on swap with lower shares; planned NuVasive looks cheap

By Rebecca Melvin

New York, March 10 – Unisys Corp.’s newly priced 5.5% convertibles edged up on an outright basis and gained about 2.5 points on swap on Thursday, market sources said, after the Blue Bell, Pa.-based information technology company priced an upsized $190 million of the five-year senior notes at the cheap end and midpoint of talked terms.

CSG Systems International Inc.’s newly priced 4.25% convertibles traded up about a point as shares fell after the Englewood, Colo.-based business services company priced $200 million of the 20-year senior notes at mixed terms compared to initial talk.

Unisys traded more actively than CSG Systems. But they were both “doing pretty well” at late morning, a New York-based trader said.

“Unisys got a [Moody’s] downgrade and the stock got hammered yesterday, but it’s doing pretty well,” the trader said.

Moody’s Investors Service said it downgraded Unisys’ corporate family rating to B2 from B1 and gave the new convertible senior unsecured notes a B2 rating. The downgrade reflected the rating agency’s expectation that Unisys’ will continue to experience lower revenue and continued cash burn over the near term.

The two new deals accounted for the lion’s share of Thursday’s market activity.

Meanwhile, traders were sizing up a planned deal from NuVasive Inc. The $550 million offering of five-year convertibles was seen as cheap ahead of final terms expected to be set after the market close.

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