SanDisk lower outright, edges up on swap; Teva below parity; planned Pernix looks cheap

By Rebecca Melvin

New York, April 16 – SanDisk Corp.’s convertibles traded lower on an outright basis but were slightly higher on swap Thursday after the Milpitas, Calif.-based flash memory chip maker reported results that missed estimates.

SanDisk was by far the single most active name in the convertibles space on Thursday. One trader said, “it’s the only name trading.”

Overall there was not much by way of price movement, a second New York-based trader said.

Despite rather weak data in the early going, stocks staged a midsession turnaround, trading in the green for a while before selling into the close, which left the major indices in the red. Treasuries remained locked in a range, and the U.S. dollar was slightly weaker. “There is not much to drive things,” the trader said.

Teva Pharmaceutical Industries Ltd.’s convertibles traded lower outright, and below parity on a hedged basis, as the stock took a hit midday on news that Sandoz has received regulatory approval for a drug that competes with one of Teva’s biggest products, a New York-based trader said.

In the primary arena, a new issue was expected to price after the market close from Pernix Therapeutics Holdings Inc. The new paper was seen as being pretty cheap, but small-deal size dampened market enthusiasm. The company plans to sell $120 million of the six-year convertible senior notes.

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