Midday Commentary: New Insulet, Jakks trade higher; SunEdison launches new convertible for $500 million

By Rebecca Melvin

New York, June 4 - Insulet Corp.'s newly priced 2% convertibles traded up to 102 bid, 103 offered in the early going on Wednesday after the Bedford, Mass.-based medical device maker priced $175 million of the five-year notes ahead of the market open at the rich end of talk. Insulet's shares were up almost 1%.

Jakks Pacific Inc.'s newly priced 4.875% convertibles were up as well, quoted at 100.5 to 101.25 with the underlying shares flat to slightly lower. The Malibu, Calif.-based toy and leisure products company priced an upsized $100 million of the six-year notes at the cheap end of talk late Tuesday.

Also in the primary market, SunEdison Inc. launched an offering of $500 million of 5.5-year convertible senior notes early Wednesday that was expected to price after the market close.

The deal, coming fast on the heels of the company's dual convertible tranches priced in December, were viewed as "attractive" on a valuation basis.

Using a credit spread of 475 basis points over Libor and a 40% vol., the deal looks about fair value or 100.38 at the midpoint of talk, a New York-based trader said.

"The new issue allows investors a chance to get involved in a more balanced convertible rather than holding the more equity sensitive old deals that trade in the 150s," the trader said.

Shares of the St. Peter, Mo.-based maker of solar silicon wafers were on the rise, last seen up 46 cents, or 2.4% at $19.95.

SunEdison's older 2% bonds are due 2018 and the SunEdison 2.75% bonds are due 2021.

The new deal was talked at a 0.5% to 1% coupon and a 25% to 30% premium, and is due January 2020.

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