Convertibles flat as equities tick lower; Pacira, Cypress shares up; TCP Capital to price

By Rebecca Melvin

New York, Aug. 30 – U.S. convertibles were little changed in quiet trading on Tuesday as equities traded off slightly in early action amid a number of economic reports.

“There’s not much of anything going on today, unfortunately,” a New York-based trader said.

LinkedIn Corp.’s 0.5% convertible due 2019 changed hands up about 0.25 point at 99.55, according to Trace data. LinkedIn’s shares were up 3 cents at $192.32.

Sina Corp.’s 1% convertible due 2018 stands at 99.5, which is essentially the same level of the LinkedIn bond, but the Sina bonds weren’t seen to have traded on Tuesday, after trading flat on Monday. Sina shares were up 24 cents, or 0.3%, at $75.29.

Pacira Pharmaceuticals Inc.’s 3.25% convertibles were indicated higher in tandem with a gain in the underlying shares. The convertible bonds gained 6 points to about 174 from 168 previously, and the common shares of Pacira Pharmaceuticals gained $1.59, or 4%, to $41.08.

Meanwhile, the 4.5% convertible bonds of Cypress Semiconductor Corp. were indicated up more than 3 points to about 112, which was up from 108.75 previously, according to a market source. The common shares of Cypress rose 62 cents, or 5.6%, to $11.75.

The Cypress stock was actively traded and among the biggest gainers on the Russell 2000 stock index.

In the primary market, TCP Capital Corp. launched an offering of $100 million of 5.5-year convertible senior unsecured notes after the market close on Tuesday that were expected to price ahead of the market open on Wednesday.

The convertibles of the Santa Monica, Calif.-based specialty finance company were talked to yield 4.5% to 4.75% with an initial conversion premium of 10%, according to market sources.

There is a $15 million greenshoe for the Rule 144A deal, which was being sold via bookrunner Raymond James.

TCP Capital focuses on credit lending to middle-market companies and small businesses.

The company intends to use the proceeds to repay debt under its revolving credit facilities, which will increase the funds available under the revolver to make additional investments in portfolio companies in accordance with its investment objective, and for other general corporate purposes.

TCP Capital shares closed up 28 cents, or 1.7%, to $16.68 but slipped about 6 cents, or 0.4%, to $16.62 in after-hours trading action.

In the broader markets, equities were edging lower in the early going on a few mixed economic data reports. The S&P 500 stock index was down 4.26 points, or 0.2%, at 2,176.12; the Dow Jones industrial average slipped almost 50 points, or 0.3%, to 18,453.06 and the Nasdaq composite index shed 9.34 points, or 0.2%, to 5,222.99.

Early Tuesday, the S&P Case-Shiller 20-city composite index showed a rise of 5.1% in June compared to the year-earlier period, which was a tick lower than the 5.2% increase expected, and it was a slowdown sequentially from May's revised 5.3% increase.

The S&P/Case-Shiller U.S. National Home Price index, which measures all nine U.S. census divisions, was up 5.1% in June from the previous year.

Meanwhile, the consumer confidence index climbed to 101.1 in August, from 96.7, hitting the highest level in 11 months, according to the Conference Board survey, and that was higher than some Wall Street estimates.

Mentioned in this article:

Cypress Semiconductor Corp. NYSE: CY

LinkedIn Corp. Nasdaq: LNKD

Pacira Pharmaceuticals Inc. Nasdaq: PCRX

Sina Corp. Nasdaq: SINA

TCP Capital Corp. Nasdaq: TCPC

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