Teva contracts on swap; new Inphi adds 0.5 point; Pandora, Vitamin Shoppe deals look cheap

By Rebecca Melvin

New York, Dec. 3 – Teva Pharmaceutical Industries Ltd.’s newly priced 7% mandatory convertibles contracted on a swap basis on Thursday after the Petach Tikva, Israel-based pharmaceutical company priced $3.375 billion of the preferred shares at the midpoint of talk, market sources said.

The new Teva 7% mandatories were quoted at 100.125 bid, 100.375 offered in the early going by a New York-based trader.

The convertibles looked to have contracted by more than a point versus a share price of $64.00.

Separately, Inphi Corp.’s newly priced 1.125% convertibles opened around 100.25 bid, 100.5 offered after the Santa Clara, Calif.-based semiconductor company priced an upsized $200 million of the five-year bonds.

The Inphi deal closed slightly below par but was better on swap versus its underlying shares, which were down 70 cents, or 2.4% at $29.05.

On tap were two more deals pricing after the market close.

Ahead of pricing, Pandora Media Inc.’s $300 million of five-year convertible senior notes looked to be about 4.5 points cheap at the midpoint of talk using a credit spread of 500 basis points over Libor and 35% vol., a Connecticut-based trader said.

The Pandora bonds were talked at a 1.75% to 2.25% coupon and a 25% to 30% premium.

The Vitamin Shoppe’s $125 million offering of five-year convertible senior notes looked to be worth 101.25 at the midpoint of talk, using a credit spread of 500 bps over Libor and 32% vol., the trader said.

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