Exelon makes strong debut; upsized j2 Global, Ariad tread water after early weakness

By Rebecca Melvin

New York, June 12 – A fresh batch of new issues in the U.S. convertibles secondary market on Thursday slipped below par in the early going with the exception of Exelon Corp.’s new 6.5% equity units, which were seen at 51.25 to 51.5 with the underlying shares of the Chicago-based utility down about 2%, market sources said.

Later the Exelon mandatories were seen at 52 with the underlying shares at $35.30, which was down about 1%.

j2 Global Inc.’s newly priced 3.25% convertibles due 2029 traded down to 99.5 with the underlying shares at $47.45, a Connecticut-based trader said. Later they were at 101 with shares up 1% at $38.31.

Ariad Pharmaceuticals Inc.’s newly priced 3.625% convertibles were seen as low as 98.375 bid and as high as 100.5 offered. One trader quoted a market at 98.375 bid, 99.375 offered at late morning. A second trader said the new notes were trading at 99.5 bid, 100 offered with the underlying shares of the Cambridge, Mass.-based oncology company down 5%. The shares ended down nearly 9%.

Colony Financial Inc.’s new add-on to its 3.875% convertibles due 2021 pulled that issue into trade, and those bonds changed hands at 101.25. Colony priced $100 million more of the 3.875% convertible senior notes due 2021, raising the deal size to $330 million.

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