Convertibles mostly in line; SanDisk, Yahoo! flat; Interactive Intelligence notes on tap

By Rebecca Melvin

New York, May 18 – U.S. convertibles traded quietly and little changed on Monday in tandem with the broader markets, which were narrowly mixed with stock markets edging up and Treasuries down.

Early on, there were active Street markets in SanDisk Corp., a New York-based trader said. Those were mostly in line, although there may have been a little strength as shares edged higher.

“It’s really very, very quiet. There is nothing going on,” the trader said.

With SanDisk shares up 44 cents, or 0.7%, at $67.63, the SanDisk 0.5% convertibles due 2020 traded in line to a little better at 102.5 to 103, according to Trace data.

The Milpitas, Calif.-based data storage company’s older 1.5% convertibles due 2017 traded at 142.87, which was up about 0.4 to 0.5 point.

Yahoo! Inc.’s 0% convertibles were also moving in line with shares of the Sunnyvale, Calif.-based internet company. The bonds were at 108.425, down about 0.9 point, according to Trace data, when shares were lower by about 1% at $44.25.

“Yahoo! is mostly on the offer side; nothing has really changed,” a New York-based trader said.

Synergy Pharmaceuticals Inc.’s convertibles and stock popped in a rally sparked by Paulson & Co.’s 13F filing in which the hedge fund revealed taking a 2.1% stake in the biopharmaceutical company.

Synergy’s 7.5% convertibles due 2019 were seen moving up to 126 from 115.6 previously. Shares ended up 38 cents, or 11%, to $3.90.

In March, Synergy was reported to be weighing options, including a sale of itself.

Photronics Inc. was quiet ahead of quarterly results announced after the market close. No levels were heard in Photronics’ 3.25% convertibles due 2019, which is a small deal and very illiquid, sources said. Shares of the Brookfield, Conn.-based maker of semiconductor manufacturing components added 3% during the session to $9.56, but they didn’t move after the market close, despite the company posting a second-quarter profit.

In the primary market, Interactive Intelligence Group Inc. launched after the market close an offering of $150 million of five-year convertible senior notes. The deal was talked at a 1.25% to 1.75% coupon and a 27.5% to 32.5% initial conversion premium.

Investors are waiting for the Federal Reserve’s April policy meeting minutes on Wednesday, one trader said. “All eyes are on the Fed,” he said, referring to the fact that market players are watching the U.S. central bank to glean what it is thinking about the economy and when to raise rates.

A second trader said that a quiet week was expected on tap ahead of the long holiday weekend for Memorial Day.

In the broader markets on Monday, equities shook off early weakness to end slightly to the upside. The Nasdaq composite index added 30.15 points, or 0.6%, to 5,078.44, the S&P 500 stock market edged up 6.47 points, or 0.3%, to 2,129.20; and the Dow Jones industrial average eked out a gain of 26.32 points, or 0.13%, to 18,298.88.

New deal on tap

Interactive Intelligence, an Indianapolis-based communications software and cloud services company, launched its deal after the market close to unresponsive after-hours stock action. The shares were unchanged after hours after ending up 32 cents, or 0.7%, at $46.67.

The Rule 144A deal has a $22.5 million greenshoe and was being sold via bookrunning managers Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and RBC Capital Markets LLC.

The notes are non-callable with no puts. They will be settled in cash, stock or a combination. In connection with the pricing of the notes, the company plans to enter into capped call transactions with one or more initial purchasers of the notes.

A portion of the proceeds will be used to pay the net cost of the capped call transactions with remaining proceeds for working capital and general corporate purposes.

Mentioned in this article:

Interactive Intelligence Group Inc. Nasdaq: ININ

Photronics Inc. Nasdaq: PLAB

SanDisk Corp. Nasdaq: SNDK

Synergy Pharmaceuticals Inc. Nasdaq: SYGP

Yahoo! Inc. Nasdaq: YHOO

© 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.