Redwood Trust trades weakly; Vipshop up on swap; Lexicon Pharmaceuticals joins calendar

By Rebecca Melvin

New York, Nov. 19 – Redwood Trust Inc.’s newly priced 5.625% convertibles traded weakly on their debut in the secondary market on Wednesday after the Mill Valley, Calif.-based real estate investment trust priced $200 million of the five-year exchangeable senior notes at a discount to par of 99.5.

The new Redwood convertibles were seen trading at 99 for much of the session, with shares up fractionally until about midsession, when they turned fractionally lower.

Redwood’s older 4.625% convertibles were quoted at 98.125 bid, 98.625 offered, which was also weak compared to previous trades.

Back in established issues, Vipshop Holdings Ltd.’s 1.5% convertibles due 2019 dropped on an outright basis but were better on swap by about a point after the Guangzhou, China-based online discount retailer posted third-quarter results that beat estimates but provided an outlook for the current quarter that was less than what investors had hoped for.

After the market close, The Woodlands, Texas-based Lexicon Pharmaceuticals Inc. launched an offering of $75 million of seven-year convertibles that was expected to price after the market close on Thursday. The convertibles were talked to yield 4.75% to 5.25% with an initial conversion premium of 20% to 25%.

Lexicon is also offering $50 million of common stock concurrently with the bonds.

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