MOVE launches convertible offering; trader says primary primed for surge in new issues

By Stephanie N. Rotondo

Phoenix, Aug. 5 - As investors and market players take advantage of the last month of summer, the convertible bond market is expected to be quiet during August, according to a trader.

Still, he noted that the "table is set" for a flurry of new issuance.

"Rates are backing up," he noted, adding that equities hit recent all-times highs. "Maybe you will see more traditional convertible issuers [entering the market]," like smaller-cap companies.

He said MOVE Inc.'s $85 million Rule144A offering of convertible senior notes due 2018 was a "prime example" of traditional issuance.

The company's stock hit a 52-week high on Friday, he said. As of the most recent quarter, the company had $32 million in cash and a $20 million bank facility that is set to expire at the end of the month.

"The stock did OK today," he remarked.

The common ended down 22 cents, or 1.49%, to $14.53.

Meanwhile, in the secondary, Ryland Group Inc.'s 0.25% convertible notes due 2019 closed at 91.5 bid, 92.5 offered, off as much as a point on the day. The stock finished down 87 cents, or 2.11%, at $40.27.

Last week, the homebuilder reported earnings of 64 cents per share on revenues of $493 million.

And, Alcoa Inc.'s 5.25% convertible notes due 2014 came in half a point to close at 126.875 versus a stock price of $8.00.

The stock was up 3 cents on the day.

Archer, Dendreon up

Archer Daniels Midland Co.'s 0.875% convertible notes due 2014 inched a little higher Monday as investors prepared for earnings on Tuesday.

The notes closed in a 102.5 to 102.875 context, which compared to 102.375 to 102.5 on Friday.

The stock finished the day up 29 cents at $37.86.

Dendreon Corp. is meantime slated to put out numbers on Thursday. Its 2.875% convertible notes due 2016 moved up half a point to 72.75 bid, 73 offered.

The equity popped 63 cents, or 13.7%, to $5.23 on Monday.

Mentioned in this article:

MOVE Inc. Nasdaq: MOVE

Ryland Group Inc. NYSE: RYL

Alcoa Inc. NYSE: AA

Archer Daniels Midland Co. NYSE: ADM

Dendreon Corp. Nasdaq: DNDN

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