Midday Commentary: Jakks Pacific to price new deal after close, older Jakks quiet; ATK active again, higher

By Rebecca Melvin

New York, June 3 - Jakks Pacific Inc.'s planned offering of $75 million of six-year convertible bullets was seen about as cheap as the company's older bonds, a Connecticut-based convertibles analyst said Tuesday.

The Malibu, Calif.-based toy and leisure products company plans to price the deal after the market close Tuesday. The offering is talked at a 4.5% to 5% coupon and 25% to 30% initial conversion premium.

Proceeds will be used to redeem Jakks' $39 million of outstanding 4.5% convertible bonds due November 2014. Jakks also has a third issue of 4.25% convertibles due 2018 of which there is about $100 million outstanding.

The older bonds were not heard in trade.

Given that the Jakks 4.5% convertibles are essentially "money good now, the odds of a holder trading them are small," a New York-based trader said.

Alliant Techsystems Inc.'s 3% convertibles were trading actively again on the heels of the company's tender offer for the paper announced on Monday. The bonds were said to be trading at parity plus 1.25 point, which was up from Monday's average trade at parity plus 0.95 point.

Market players are thought to be considering holding on to the option and not tendering in expectation that the Arlington, Va.-based aerospace and defense company potentially sweetens its offer, the trader said.

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