Midday Commentary: TTM Technologies launches offering; existing TTM flat; USEC in focus

By Rebecca Melvin

New York, Dec. 16 - TTM Technologies Inc.'s planned $150 million of seven-year convertible senior notes was seen fair value to cheap early Monday after the Santa Ana, Calif.-based maker of printed circuit boards launched the registered offering ahead of the market open.

The TTM deal - the proceeds of which will be used to take out some of the existing TTM convertibles - was seen at 100.7 at the midpoint of talk, using a credit spread of 450 basis points over Libor and a 27% vol., according to a Connecticut-based trader.

The trader said that some market players were using a 30% vol. input, which makes the deal worth 102.6 at the mids. But "we think that is too high," the trader said.

TTM's existing 3.25% convertibles due 2015 were flat at 101.625 bid, a New York-based trader said.

That "is in line with where they have been the past couple of weeks," the trader said.

Back in the secondary market, USEC Inc.'s 3% convertibles due October 2014 were in focus but were not heard to have traded after news that the Bethesda, Md.-based supplier of nuclear fuel and services has reached an agreement with most noteholders to allow the company to file for Chapter 11 bankruptcy.

Under the pre-packaged bankruptcy plan, the $530 million of convertible debt would be replaced by debt totaling $200 million. The new debt would have a maturity of five years, which would automatically extend an additional five years upon the occurrence of certain events.

The restructuring plan also contemplates that the existing equity will be replaced with new equity. The noteholders would receive 79% of the new equity as common stock. The plan calls for Toshiba and B&W to jointly obtain 16% of the new common stock, as well as $40 million in debt on the same terms as the noteholders, in exchange for their existing preferred equity investment.

USEC shares plunged about $5.00, or 57%, to $3.81 in early action Monday.

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