Morning Commentary: NXP Semiconductors, Molina convertibles trade higher

By Abigail W. Adams and Rebecca Melvin

Portland, Me., Nov. 6 – NXP Semiconductors NV’s 1% convertible senior notes due 2019 continued to make gains on Monday morning in the wake of Broadcom Ltd.’s bid for Qualcomm Inc., which is already planning to acquire NXP.

NXP’s convertible was at $123.48 shortly after the market open on Monday, according to Trace data, up from $122.90 at the close on Friday.

The notes had gained by 0.5 point outright in an uptick in trading on Friday.

The 1% issue has $1.15 billion outstanding.

Qualcomm is proposing to buy NXP at a price of $110.00 per share, an acquisition announced in October 2016 and currently expected to close later this year or early in 2018.

Broadcom announced an unsolicited bid for Qualcomm on Monday morning which at $130 billion would be the largest tech deal in history.

In its announcement, Broadcom said its offer would stand whether Qualcomm completes the purchase of NXP or not.

The deal carries a $5 billion convertible debt financing commitment from Silver Lake Partners, a Calif.-based equity investment firm focused on technology, according to Broadcom’s investment presentation.

Meanwhile Molina Health Care, Inc.’s 1.625% convertible made large gains in heavy trading on Friday, rising over 10 points to 138.86, according to trace data, with its stock up about 14%.

Molina’s 1.125% convertible contracted 0.25 to 0.375 points on swap on Friday, a market source said.

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