Planned SunEdison seen cheap; existing SunEdisons finish unchanged; Depomed drops outright

By Rebecca Melvin

New York, May 12 – U.S. convertibles players viewed SunEdison Inc.’s two $375 million tranches of convertible senior notes as fairly cheap ahead of final terms expected to be fixed after the market close.

The new deal “should be popular with investors,” a Connecticut-based sellsider said. “I get them 2% to 3% cheap.”

SunEdison’s four existing convertible issues were pulled into trade and moved in tandem, or in line, with the underlying shares, a syndicate source said.

“They were all pretty much unch’d,” the source said.

Back in established issues, Depomed Inc.’s 2.5% convertibles due 2021 tumbled on an outright basis, dropping nearly 17 points to 125.75 on a 16% drop in the underlying shares after disappointing earnings.

The Newark, Calif.-based specialty pharmaceutical company reported quarterly results that missed expectations and guided full-year revenue in line with expectations.

Also dropping on an outright basis were the 2.75% convertibles of Orexigen Therapeutics Inc. after the San Diego-based biopharmaceutical company announced together with Takeda Pharmaceutical Co. Ltd. that their cardiovascular study (Light Study) of its Contrave obesity drug has been terminated due to concerns that interim data that was released in March may compromise decisions regarding whether to prescribe and take the diet drug.

Orexigen’s 2.75% convertibles due 2020 were indicated down at 101 from about 108.5 previously. Orexigen shares fell 93 cents, or 13.6%, to $5.93.

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