American Tower mandatory adds on debut; Prologis expands on hedge; salesforce contracts

By Rebecca Melvin

New York, Feb. 26 – American Tower Corp.’s newly priced 5.5% convertible mandatory preferred shares traded well on their debut in the convertibles secondary market on Thursday after the Boston-based communications tower sites company priced $1.25 billion of the stock through the rich end of dividend talk, market sources said.

The American Tower mandatory was last seen at 101.5 bid, 102 offered versus the underlying stock at about $98.00. That was better on a dollar-neutral, or hedged, basis by 0.75 point, a New York-based trader said.

Also in the primary arena, Rovi Corp. was expected to price $300 million of convertible notes after the market close. Shares of the Santa Clara, Calif.-based software and internet media company were down 5% on the back of the convertibles launch.

Back in established issues, the Prologis convertibles were slightly lower on an outright basis but improved on a dollar-neutral basis in heavy trading action after news that the Denver-based real estate investment trust was going to pay out its dividend after the March 15 maturity of the convertibles.

Meanwhile, salesforce.com Inc.’s 0.25% convertibles due 2018 jumped about 6.5 points on an outright basis but contracted on a hedged basis by about a point as outright sellers stepped in to take profits, a New York-based trader said.

Also in trade was Emulex Corp. after news that Avago Technologies Ltd. of Singapore has agreed to purchase the Costa Mesa, Calif.-based networking software and hardware company for $606 million.

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