New Medicines convertible notes gain on swap; planned Nevro looks cheap; Zillow jumps

By Rebecca Melvin

New York, June 7 – Medicines Co.’s newly priced convertibles traded up on Tuesday after the Parsippany, N.J.-based health care company priced $350 million of the seven-year senior notes at the midpoint of coupon talk.

The new Medicines 2.75% convertibles due 2023 traded up to about 102 on an outright basis and were seen up on swap by 1.5 points to 2 points, according to a market sources. Medicines shares were up only about 25 cents, or 0.7%, at $37.21 at that point. The shares ended the day up $1.11, or 3%, at $38.07.

Market players were also sizing up Nevro Corp., which launched an offering for $125 million of five-year convertible senior notes, which were expected to price after the market close.

The new Nevro deal was seen about 2.5 points cheap at the midpoint of price talk, using a credit spread of 700 basis points over Libor and a 40% vol., according to a trader.

“It’s a nice piece of paper,” the trader said.

Nevro shares held in pretty well after the deal launch, ending the day down 70 cents, or 0.95%, at $72.73.

Back in established issues, Zillow Group Inc.’s 2.75% convertibles, formerly the Trulia Inc. bonds, jumped in early trade to the mid 140s from the mid 130s, according to Trace data, after news that the real estate website settled a lawsuit over trade secrets for $130 million.

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