NQ Mobile, Teva Pharmaceutical better on swap; Yandex in trade; YRC Worldwide in focus

By Rebecca Melvin

New York, Jan. 21 - U.S. convertibles were mixed in generally quiet trade on Tuesday, which was the first day back for market players after a three-day weekend for the Martin Luther King Jr. holiday, sources said.

Volume picked up before the end of the session, but the primary market remained quiet, they said.

Back in established issues, traders watched NQ Mobile Inc.'s convertibles, which improved by about a point on the day, with shares of the Beijing- and Dallas-based mobile internet services company higher.

Teva Pharmaceutical Industries Ltd.'s convertibles were also in trade and better by about 0.75 point on a dollar-neutral, or hedged, basis.

Green Plains Renewable Energy Inc.'s 5.75% convertibles jumped again on an outright basis on Tuesday along with shares that were up about 3%. The shares have been on a tear since early last week and are up about 15%.

Yandex NV's convertibles changed hands Tuesday at 110 with the underlying shares at $43.02, which is where the underlying shares of the Russian internet search engine opened, a New York-based trader said. The stock added 1.5% on the day.

Alcoa Inc.'s convertibles traded in line with where they have been in recent sessions at parity plus about 0.05 point, with the shares of the New York-based aluminum producer higher on an upgrade by J.P. Morgan Securities to "overweight" from "neutral."

Traders also began to notice Albany Molecular Research Inc.'s 2.25% convertibles. The bonds don't "look that bad on a set up basis with the stock back up above $11.00 on Tuesday," one trader said.

"It stopped out on the downside with outright buyers interested in the bonds at an implied level of $10.50 in the stock," the trader said.

YRC Worldwide Inc.'s convertibles were also in focus Tuesday as shares of the Overland Park, Kan.-based trucking company surged on news that a tentative deal has been reached between the company and the Teamsters union. Previously union employees voted down the contract, on which the company's much-needed refinancing hinges.

The revised deal unveiled Friday was expected to be reviewed by local union officials and will then have to be ratified by union members.

YRC shares jumped about 15% in early trading and ended higher by 11%. YRC's 10% series A convertibles due in 2015 weren't heard to have traded.

"People are trying to figure where they are," a New York-based trader said of the convertibles.

Stocks ended mixed after alternating gains and losses for the S&P 500 stock index and the Dow Jones industrial average. The S&P 500 added 5.10 points, or 0.3%, to 1,843.80; the Dow Jones fell 44.12 points, 0.3%, to 16,414.44; but the Nasdaq stock market gained 28.18 points, or 0.7%, to 4,225.76.

NQ Mobile improves

NQ Mobile's 4% convertibles due 2018 were up about a point at 82 bid, 84 offered, with shares of the company in the $16.50 area, a trader said.

Shares actually jumped a little higher, gaining $1.46, or 9%, to $17.07.

The NQ convertibles have improved, a New York-based trader said, adding that "fear in the name is dissipating."

NQ Mobile sold $150 million of the notes on Oct. 9, only a couple of weeks ahead of a report on Oct. 24 by Muddy Waters LLC, a Hong Kong-based research firm, alleging that the company was engaged in "massive fraud." The company denied the accusation. But the criticism sent the new issue down to around half of par value.

Teva bonds up

Teva's 0.25% convertibles due 2026 were seen at 110.25 with the shares at about $43.30.

Shares of the Petach Tikva, Israel-based generic drug maker ended up $1.04, or 2.4%, at $45.31.

The bonds were up about 0.75 point on swap, a New York-based trader said, while calling overall moves in the secondary market mixed.

In news Tuesday, Teva was the beneficiary of a deal scrapped between NuPathe Inc. and Endo Health Solutions Inc., with NuPathe agreeing to be acquired by Teva for $3.65 per share, or $144 million, which was a better offer than Endo's.

NuPathe is the developer of a migraine pain patch that is the first and only one approved by the U.S. Food and Drug Administration. The patch was approved about a year ago but has yet to launch commercially.

The NuPathe-Teva transaction is expected to be completed in February.

Mentioned in this article:

Albany Molecular Research Inc. Nasdaq: AMRI

Alcoa Inc. NYSE: AA

Green Plains Renewable Energy Inc. Nasdaq: GPRE

NQ Mobile Inc. NYSE: ADS: NQ

Teva Pharmaceutical Industries Ltd. Nasdaq: TEVA

Yandex NV Nasdaq: YNDX

YRC Worldwide Inc. Nasdaq: YRCW

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