Convertibles see better bidders; Impax up outright with FDA news; Dycom, Stericycle on tap

By Rebecca Melvin

New York, Sept. 8 – U.S. convertibles were moving higher on an outright basis and mostly in line on a hedged basis with higher equities on Tuesday to start the holiday-shortened work week following Labor Day. U.S. financial markets were closed on Monday.

The convertibles market was not yet in high gear following the holiday weekend, but there was new issue activity that portends a more significant pickup in activity. Outside of a deal here or there, the new issue market was essentially shuttered in July and August.

In Canada, Emera Inc. agreed to sell C$1.9 billion of 4% 10-year convertible subordinated debentures in a secondary offering on a bought-deal basis, the proceeds of which would be used to help fund its planned acquisition of TECO Energy Inc., the Tampa, Fla.-based energy-related holding company and utility, for $10.4 billion.

In the United States, Dycom Industries Inc. launched an offering of $400 million of six-year convertible senior notes after the market close. Pricing of the Rule 144A Dycom deal was expected to occur after the market close on Wednesday. And Stericycle Inc. planned to price $700 million of series A mandatory convertible preferred stock at the same time.

Back in secondary action, Impax Laboratories, Inc.’s 2% convertibles due 2022 were up 3 points to almost 99 at late morning, according to Trace data, as the common stock of the Hayward, Calif.-based specialty pharmaceutical company jumped 10% in response to positive FDA news.

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