Abgenix goes to 104; NRG climbs to 106.5; Gateway, BearingPoint up when-issued

By Ronda Fears

Nashville, Dec. 16 - A trio of new deals - perhaps the last of 2004 - were at bat after the close, and players were in a shopping mode ahead of the holidays, bidding the fresh paper higher in the gray market. Extending the buying mood, recent new issues continued to climb as well.

"A lot of funds are looking to deploy capital, put cash to work right now," said one sellside trader. "There is some selling going on, too, but the overall tone seems to me to be that people are in a buying mood."

NRG Energy Inc.'s new private placement convertible, he noted, continued to climb and was trading very active. The new 4% perpetual convertible gained about 1.5 points Thursday to close at 106.5 bid, 107 offered, while the stock settled off a nickel, or 0.15%, to $34.26.

Moreover, the convertible market was soft Thursday, traders said, but the mega merger of Nextel Communications and Sprint Corp. was still a driver for the telecom group, and many of those issues were higher. The Nextel convertibles were hovering at 102.5 bid as players remained fixated with the stock. Lucent Technologies Inc. and Motorola Inc. also were both higher, with converts linked to those names up around 3 points, traders said.

Nextel Partners Inc., however, regained some ground after a big fall on Wednesday as the merger was officially aired, and the 31.5% Nextel-owned equipment provider's fate was left flapping. The old 1.5% due 2008 convertibles added back 3.5 points, and the new 1.5% due 2008 converts rose 2 points.

Airline paper also was mentioned by several traders, with the major carriers' convertible paper split. Delta Air Lines Inc. and Northwest Airlines Corp. were both lower, with those converts off about 0.75 point, traders said, while AMR Corp - parent to American Airlines Inc. - and Continental Airlines Inc. up about a half-point each.

New issues took center stage, however, with deals totaling $615 million at bat after the close Thursday. The trio of deals included DOV Pharmaceutical Inc., a Hackensack, N.J.-based biotech focused on neurological and cardiovascular treatments, with $65 million of 20-year convertible notes talked to yield 2.5% to 3.05% with a 25% to 30% initial conversion premium.

Computer and data consulting firm BearingPoint Inc.'s $350 million two-parter was up in the gray market, buyside traders said.

Also, Abgenix closed at 104 bid

Abgenix Inc. bumped up its deal to $225 million from $150 million and printed the seven-year non-call five convertible with a 1.75% coupon and 30% initial conversion premium. The deal priced at the aggressive end of guidance for a 1.75% to 2.25% coupon and 25% to 30% initial conversion premium.

At the middle of price talk, analysts had put the new Abgenix convertible about 2% cheap.

The biotech concern, which is focused on treatments for cancer, inflammation, metabolic, autoimmune, cardiovascular and infectious diseases, is taking out its 3.5% convertible notes due 2007 with some proceeds, and that issue was still seen steady at about par.

Before pricing, the new Abgenix convert was seen in the gray market with a bid of 2.5 points over issue price. It broke at 104.5 bid on Thursday but swiftly backed off with an early trade at 103.5 but recovered steadily through the afternoon, a buyside trader said.

Bookrunner Goldman Sachs & Co. closed the new Abgenix at 104 bid, 104.5 offered.

Abgenix stock ended lower Thursday by 23 cents, or 2.33%, at $9.63.

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