Morning Commentary: New Kindred Healthcare trades up; planned Lexicon deal, stock borrow eyed

By Rebecca Melvin

New York, Nov. 20 – Kindred Healthcare Inc.’s newly priced mandatory convertibles were seen last at 102 bid early Thursday, a trader said, after the Louisville, Ky.-based diversified health care provider priced $150 million of the $1,000 par units at the cheap end of talked terms.

Out of the chute, the new Kindred mandatories traded up to 101, and then were bid there. But Kindred shares, which were up in the early going, continued higher. The shares were last seen up 57 cents, or 2.9%, at $20.33.

Market players were also interested to learn that Cloud Peak Energy Inc. canceled its planned $100 million of mandatory convertible preferred stock late Wednesday, citing market conditions.

Speculation around why the deal was scuttled included the fact that the coal sector, of which Cloud Peak is a part, is weak. Because if that, the deal “needed to come cheaper,” a New York-based trader said.

Also in the market early Thursday was a small deal from The Woodlands, Texas-based Lexicon Pharmaceuticals Inc. The $75 million offering of seven-year convertibles was going to be challenged, one trader said, because stock borrow in the name is limited.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.