Nuance Communications brings new deal, paper cracks par; Regeneron's new convertibles flat

By Stephanie N. Rotondo

Portland, Ore., Oct. 19 - It was a subdued day for the convertible bond market Wednesday, traders reported.

A trader said "there seems to be a better feel to the [broader] market, but I'm not sure that translates to the convertibles market."

Nuance Communications Inc. priced an issue of 2.75% senior convertible notes due 2031. The deal was priced at par and quickly traded above that, according to market sources.

However, Regeneron Pharmaceuticals Inc.'s new issue that came Tuesday was still trading below par.

Meanwhile, Global Industries Ltd.'s convertibles were heading up modestly. The notes have been slowly creeping higher ever since it was announced that Paris-based Technip was acquiring the company.

Powerwave Technologies Inc.'s convertibles, however, were weakening amid "bad earnings," a trader said.

Nuance breaks par

Nuance Communications priced a $600 million issue of 2.75% convertible senior notes due 2031 on Wednesday at par with an initial conversion premium of 37.5%.

There is a $90 million over-allotment option.

Morgan Stanley & Co. LLC was the lead manager.

A trader said the new issue was trading at 103 versus a stock price of $24.00 shortly before the close. He also saw the 2.75% convertible notes due 2027 trading at 139.25.

At another desk, a trader quoted the new issue at 102.625 bid, 102.875 offered versus a stock price of $23.95.

A third trader said the new notes "seemed to be active," pegging them at 102.25 bid, 102.75 offered versus a share price of $23.95.

Nuance is a Burlington, Mass.-based voice recognition software provider.

Regeneron deal lackluster

Among other recent new issues, Regeneron's $400 million issue of 1.875% convertible senior notes due 2016 was failing to gain traction.

A trader placed the paper at 98.5 versus a stock price of $61.30 shortly before the market closed.

"That's probably cheaper than where they were offered [Tuesday]," he said.

Another trader saw the notes at 97.25 versus a stock price of $60.50 on Wednesday.

The Tarrytown, N.Y.-based biopharmaceutical company brought the deal on Tuesday via lead manager Goldman Sachs & Co.

Global Industries gains

A trader said Global Industries' 2.75% convertible notes due 2027 traded up half a point to 98.125 bid, 98.25 offered.

The company is a takeover target of Technip, which has offered $8.00 per share for the company. The takeover was announced in September, and the convertibles have been gaining ground ever since, he said.

"They were in the 60s and then went into the 90s," he said.

Another trader saw the notes at 98.5.

Global Industries is a Houston-based provider of offshore construction, engineering, project management and support services, including pipeline construction, platform installation and removal, deepwater/SURF installations, IRM, and diving to the oil and gas industry.

Powerwave plummets

Santa Ana, Calif.-based Powerwave Technologies, a supplier of end-to-end solutions for wireless communications networks, released third-quarter guidance on Tuesday, which resulted in losses for the company's convertibles on Wednesday.

A trader said the 3.875% convertible notes due 2027 fell to 48 bid, 50 offered, down from previous levels in the mid-70s.

"The stock went from $1.46 to 83 cents," he said.

The stock closed at 85 cents, down 61 cents, or 41.78%.

In a press release issued Tuesday, the company said it was expecting revenues to be between $75 million and $79 million.

A conference call was held Wednesday morning, and full results are expected to be released Nov. 1 after the bell.

Mentioned in this article:

Global Industries Ltd. Nasdaq: GLBL

Nuance Communications Inc. Nasdaq: NUAN

Regeneron Pharmaceuticals Inc. Nasdaq: REGN

Powerwave Technologies Inc. Nasdaq: PWAV

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