James River trades higher; Liberty Global prices deal; BioMarin slips on news; Ford gains

By Rebecca Melvin

New York, Nov. 13 - James River Coal Co.'s newly priced 4.5% convertibles were at 102 bid, 105 offered early Friday, with trades seen also at 102, as its shares mostly hugged the flat line on their debut, market players said.

Liberty Global Inc. also debuted after the international cable operator based in Englewood, Colo., priced an upsized overnight issue of $850 million of seven-year convertible senior notes, with allocation and final terms set before the market open Friday, according to a syndicate source.

The deal was not heard in the secondary market, however, and was thought to have been mostly sold internationally.

BioMarin Pharmaceutical Inc. slipped after the biopharmaceutical firm warned that foreign particles had been detected in some of its products from a Genzyme plant. BioMarin shares dropped precipitously right after the news but had pared losses to end just slightly lower.

Ford Motor Co., which priced $2.5 billion of new convertibles a week ago, saw that paper continue to strengthen through the week, trading Friday at 108 versus a share price of $8.33, compared to 106 versus a share price of $8.05 on Monday.

Advanced Micro Devices Inc. also remained a name in focus after the company's two convertible bond issues were active Thursday on word that competitor Intel Inc. will pay AMD $1.25 billion to settle lawsuits.

James River seen 102 bid, 105 offered

James River's newly priced 4.5% convertibles due 2015 gained in early trade after pricing late Thursday an upsized $150 million of six-year convertible senior notes.

The deal was originally going to be $125 million in size. It came at the rich end of talk, which was 4.5% to 5% for the coupon with an initial conversion premium of 25% to 30%.

The Rule 144A deal, which sellsiders suggested may have been facing problems on Thursday during marketing, was over-subscribed and upsized, a syndicate source said Friday.

UBS Investment Bank was the bookrunner of the offering, with Raymond James & Associates as lead manager. Co-managers were Davenport & Co. and Brean, Murray, Carret & Co.

About $57.3 million of proceeds will be used in connection with termination of James River's letter-of-credit facility, with the remainder earmarked for working capital and general corporate purposes, which may include acquiring or investing in business or other assets or repaying outstanding debt.

James River is a Richmond, Va.-based coal producer.

Liberty Global's 'stealth' deal

Liberty Global priced an upsized $850 million of seven-year convertible senior notes to yield 4.5%.

The Rule 144A deal, sold via Goldman Sachs & Co. as the bookrunner, was originally going to be $750 million in size and came at the midpoint of talk for the coupon, which was 4.25% to 4.75%, and at the cheap end of talk for the premium, which was 15% to 20%.

The premium was based on a basket of Liberty Global's series A and series C common stock at closing Nov. 12.

The bonds will be non-callable for life, with no investor puts. There is full dividend protection and a conversion rate adjustment for a make whole event. A change of control would constitute an event of default.

Proceeds of Liberty Global's deal will be used to pay for a portion of the acquisition of Unitymedia GmbH for about €2 billion.

BioMarin eases

BioMarin's 2.5% convertibles due 2013 traded at 117.5 versus a share price of $16.50 on Friday, according to one sellside source, and that looked to be about a point lower than a previous level. Another source put the BioMarin 2.5% convertibles at 116.5 at the close, compared to 117.2 on Thursday.

Shares of the Novato, Calif.-based biopharmaceutical firm, which makes treatments for rare disorders, dropped sharply immediately after the news that some of its products may have been infiltrated by foreign particles, but losses were pared by day's end, settling lower by just 14 cents, or 0.84% at $16.53.

The company confirmed that it was notified by Genzyme that, in rare circumstances, it has detected foreign particles in some products filled at the Allston Landing facility.

To ensure that patients are not exposed to foreign particles during product administration, Genzyme has issued a "Dear Doctor" letter to all physicians treating patients with enzyme replacement products that it markets, including BioMarin's Aldurazyme, according to a release.

The letter states that foreign particles have been found in some vials filled at Genzyme's Allston Landing facility and reminds physicians, as a preventive measure, to use a 0.2-0.22 micron filter during administration, the release stated.

For Aldurazyme, this is essentially a reminder as the Aldurazyme approved product label has always recommended the use of a 0.22 micron filter when administering the drug. Accordingly, BioMarin does not expect this letter to have any substantial effect on the usage of Aldurazyme, or on the company's financials.

Due to a mutual decision by BioMarin and Genzyme, BioMarin has been transitioning Aldurazyme production to other fill finish facilities. The last finish of Aldurazyme at Allston Landing was September 2008.

Similar to the Aldurazyme label, the Naglazyme product label also recommends the use of a 0.22 micron filter prior to administering the drug to patients.

Ford gains traction

Ford's new 4.25% convertibles due 2014 traded Friday at 108 versus a share price of $8.33, which compared to 106 versus a share price of $8.05 on Monday and 101 bid, 101.75 offered versus a share price of $7.68 on Nov. 6.

The move from Nov. 6 to last Monday represented a 1-point jump on a dollar-neutral basis.

Shares of the Dearborn, Mich.-based automaker raced higher by 7.6% over the last week. The shares were at $8.34 near the end of trading Friday, which was up another 13 cents, or 1.7%.

In the Nov. 2 week, Ford shares gained 10.7% as investors remained upbeat on the name after a surprise billion-dollar third quarter.

The paper had contracted after pricing in the middle of the Nov. 2 week.

AMD 6% paper stable, higher

AMD's 6% paper due 2015 traded at 81.25, which was within the range of 80.5 to 87 seen Thursday, when it jumped about 10 points.

Both the 6s and the AMD 5.75% bonds traded actively on Thursday after word that AMD was getting a $1.25 billion settlement out of Intel connected to lawsuits against Intel that it used illegal means to bolster its 80% market share globally for central processing units.

Mentioned in this article:

Advanced Micro Devices Inc. NYSE: AMD

BioMarin Pharmaceutical Inc. Nasdaq: BMRN

James River Coal Co. Nasdaq: JRCC

Liberty Global Inc. Nasdaq: LBTYA, LBTYK

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.