Kindred convertibles trade up; week’s other new deals improve; market ‘better to buy’

By Rebecca Melvin

New York, Nov. 20 – Kindred Healthcare Inc.’s newly priced mandatory convertibles traded up smartly Thursday and added on a dollar-neutral, or hedged, basis after the Louisville, Ky.-based diversified health care provider priced $150 million of the $1,000 par units at the cheap end of talked terms.

Out of the chute, the new Kindred mandatories traded up to 101, and then they were bid there. Kindred shares, which were up in the early going, continued higher, ending the session up 5%. The bonds were last marked at 104.625 bid, 105.125 offered.

Other deals this week, which garnered lackluster or negative response initially, improved on Wednesday, a New York-based trader said.

“The market was generally ‘better to buy’ – more so than in the past week,” the trader said.

Issues that improved included Redwood Trust Inc.’s 5.625% convertibles. That paper traded up to the high 99 level from the low 99 level on Wednesday after the Mill Valley, Calif.-based real estate investment trust priced $200 million of the five-year exchangeable senior notes at a discount to par of 99.5.

The $100 million William Lyon Homes 6.5% tangible equity units, which debuted Tuesday, traded up at 106 bid, 106.5 offered on Thursday after “a few days of not doing much,” the trader said.

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