Downsized Endologix trades up on debut; Kinder Morgan trades better; Integrated Device Technology on tap

By Rebecca Melvin

New York, Oct. 28 – Endologix Inc.’s newly priced 3.25% convertibles traded up on their debut in the secondary market on Wednesday after the Irvine, Calif.-based developer and maker of aortic disorder treatments priced a downsized $110 million of the five-year senior notes at the cheap end of talked terms.

The new Endologix convertibles rose in trading to 105.25, a syndicate source said.

The new bonds expanded multiple points on a dollar-neutral basis initially but the stock rose through the morning session, so that some of that swap gain was wrung out of pricing, the source said.

Equities, in general, dropped sharply after the Federal Reserve Open Market Committee finished up its two-day policy meeting, during which it decided to leave the fed funds rate unchanged but took aim at a possible rate hike at its December meeting.

Perhaps the day’s busiest issue in convertibles was Kinder Morgan, Inc.’s 9.75% mandatory convertible, which was better on Wednesday compared to Tuesday, when the $1.57 billion deal debuted in the secondary market.

Kinder Morgan’s mandatory was seen at about $49, after it dropped to about $48 on Tuesday. Kinder Morgan shares were up 46 cents, or 1.7%, at $27.74. The deal had priced at $49.

In the primary market, Integrated Device Technology Inc. launched an offering of up to $373.75 million of seven-year convertible bonds that were talked to yield 0.625% to 1.125% with an initial conversion premium of 35% to 40%. Pricing was seen occurring after the market close on Thursday.

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