Acorda, EZCorp end flat after early weakness; planned Restoration Hardware bid above issue

By Rebecca Melvin

New York, June 18 – U.S. convertibles appeared to be suffering from a mild case of indigestion on Wednesday as two new deals released for secondary dealings lagged on a dollar-neutral, or hedged, basis, at least initially. But both deals were said to have ended in line, or flat, on a hedged basis by the market close, syndicate sources said.

On strong trading volume, Acorda Therapeutics Inc.’s newly priced 1.75% convertibles due 2021 traded up to 105.66 on an outright basis. The bonds traded in line late in the day on a delta in the mid-60% range and shares that were 6% higher at the time, a syndicate source said. Acorda shares ended up 7.8%.

EZCorp Inc.’s new 2.125% convertibles due 2019 ended the session at 98.75 bid, 99.25 offered with the shares at $11.57. The bonds were flat or slightly lower on the bid side on a dollar-neutral basis with shares ending down 2.8%, a syndicate source said.

Restoration Hardware Holdings Inc.’s $300 million deal of five-year convertible senior notes was bid above issue in the gray market ahead of final terms expected to be fixed after the market close.

“The name-brand value will draw outright institutions, and people are following that forward, expecting pretty aggressive pricing,” a New York-based trader said of Restoration Hardware.

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