Planned Ironwood looks cheap; Avid pricing also looks fairly cheap; Micron notes improve

By Rebecca Melvin

New York, June 9 – Convertibles players were sizing up two new deals in the market on Tuesday that were set to price after the market close.

Ironwood Pharmaceuticals Inc.’s planned $300 million offering of seven-year convertible senior notes looked like it was priced appropriately, one trader said, and should do well.

Shares of the Cambridge, Mass.-based pharmaceutical company slumped 11% on the heels of the new convertibles launch, prompting the trader to comment, “It doesn’t look like a good outright book.”

Also in the market, Avid Technology, a Burlington, Mass.-based digital media company, planned to price $115 million of five-year convertibles. That deal modeled with a tighter credit spread and lower vol. and was seen less cheap. Avid shares came off 9%.

Back in established issues, there were no discernible trends. Existing paper in the sectors represented by the new deals didn’t seem to be under any pressure, a New York-based trader said.

Newmont Mining Corp.’s 1.625% convertibles were trading actively in the early going following news that the Denver-based mining company has agreed to purchase a Colorado mine from AngloGold Ashanti Ltd. for $820 million.

Micron Technology Inc.’s 3% convertible senior notes due 2043 were trading a little better on swap as shares of the Boise, Idaho-based chipmaker traded down 2.8%.

The Micron convertibles changed hands at about 105 with the underlying shares at $25.19.

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