Ctrip.com convertibles improve on hedged basis as stock is hit; Impax tracking toward par

By Rebecca Melvin

New York, Oct. 19 – Ctrip.com International Ltd.’s convertibles slipped outright, but added on a dollar-neutral, or hedged, basis on Thursday as shares of the Shanghai-based travel company, which underlie the bonds, stumbled.

The new Ctrip 1.25% convertibles due 2022 and Ctrip 1.99% convertibles due 2025 both improved about 0.25 point, a New York-based trader said.

The Ctrip 1.25% convertibles due 2018 were better by about 0.125 point; and the Ctrip 1% convertibles due 2020 were better by about 0.5 point on a hedged basis.

Ctrip American Depository Shares fell $4.47, or 8.2%, to $49.80. There was no apparent news bringing the shares down, but the travel services company in China has been facing increased competition.

The bonds improved based on their gamma convexity related to the stock move, the trader said.

Impax Laboratories Inc.’s convertibles continued to be the premier issue in U.S. convertibles early Thursday, moving up for a third straight day and getting closer to par after news that it is merging with Amneal Pharmaceuticals LLC.

The Impax 2% convertibles due 2022 were last at 97.625, which was up a point from late Wednesday. The issue continued to be the most actively traded convertible bond, according to Trace data.

The primary market remained muted, but Tarrytown, N.Y.-based Immune Pharmaceuticals Inc. priced $18 million of units of preferred stock and warrants, according to a release.

Immune Pharmaceuticals’ common shares fell 39% in early trading to under $1.00.

The $1,000 par Immune Pharmaceuticals units are made up of one share of series E convertible preferred stock and 982 warrants, each of which entitles the holder to purchase one share of Immune’s common stock.

The warrants are initially exercisable at a price of $1.10 per share and expire seven years from the date of issuance.

Mentioned in this article:

Ctrip.com International Ltd. Nasdaq: CTRP

Immune Pharmaceuticals Inc. OTC: IMNP

Impax Laboratories Inc. Nasdaq: IPXL

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