General Cable well-received; GM, Ford slip; AMR flies high on Icelandic air; St. Jude, LifePoint up

By Evan Weinberger

New York, Sept. 27 - General Cable Corp.'s new convertibles were the highlight of the trading day Thursday, and they received a hearty welcome from investors. The bloom was off of General Motors Corp.'s recent rise as all four of its convertibles traded lower. They were joined on the slide by Ford Motor Co.

Another transportation-related convertible, AMR Corp., moved higher in trading Thursday.

In the health care sector, St. Jude Medical Inc. and LifePoint Hospitals Inc. convertibles both moved higher, while in the semiconductors space, Micron Technology Inc. was up and Intel Corp. was down.

Coming in a little earlier than expected, General Cable priced an upsized $415 million of senior convertible notes due Oct. 15, 2012 with a 1% coupon and an initial conversion premium of 27.5%. The deal, which was originally announced at $450 million on Sept. 12 and then re-sized to $400 million Tuesday, was talked at a coupon of 1% to 1.5% and an initial conversion premium of 22.5% to 27.5%. It was also talked to price Thursday after market close but came in Thursday morning. There is a $60 million greenshoe.

General Cable, a Highland Heights, Ky.-based copper, aluminum and fiber optic wire and cable producer and distributor, plans to use the proceeds to partially fund its purchase of Freeport-McMoRan Copper & Gold Inc.'s wire and cable division. That deal, announced Sept. 12, is expected to cost General Cable $750 million.

Traders and analysts reported that activity remained at the languid pace it established earlier in the week, although some issues were moving.

Equity markets maintained their flatness as well. An unexpected drop in new jobless claims last week may have balanced out news everyone appeared to be expecting: The Commerce Department reported new home sales were down 8.3% in August to the lowest point in seven years. Speculation again moved toward the prospect of a further rate cut.

The Dow Jones Industrial Average shrugged Thursday, adding 34.79 points, or 0.25%, to close at 13,912.94. The Nasdaq also appeared indifferent, posting a 10.56 point, or 0.39%, gain for a 2,709.59 close. The Standard & Poor's 500 matched the Nasdaq's activity, closing at 1,531.38, a gain of 5.96 points, or 0.39%.

General Cable greeted warmly

General Cable's senior convertible notes were first floated on Sept. 12, when they announced the acquisition of Phelps Dodge International Corp., the wire and cable unit of Freeport-McMoRan Copper & Gold. The deal finally came to market Thursday morning - although speculation had been that it was set to price Thursday after market close - at $415 million with a 1% coupon and a 27.5% initial conversion premium. The convertibles, with a maturity date of Oct. 15, 2012, come with a conversion price of $83.93 and a conversion ratio of 11.9142.

Investors, who had been generally praising the General Cable convertibles in the day leading up to their release, weren't bluffing in their assessment. The convertibles closed at 105.25 versus a closing stock price of $68.19 Thursday.

General Cable stock (NYSE: BGC) posted a big gain of $2.36, or 3.58%.

GM, Ford convertibles slip

In the second day after Detroit-based GM's tentative agreement with the United Auto Workers, profit-taking took a toll on the stock. After rising more than 9% Wednesday, GM stock was off around 3% Thursday. GM's convertibles appear to have suffered a similar fate.

GM's 4.5% series A convertible notes due March 11, 2032 (NYSE: GXM) were off 4 cents, or 0.19%, for a close at $20.99.

GM's 5.25% series B convertible notes due March 11, 2032 (NYSE: GBM) took a bigger hit, closing down 20 cents, or 0.94%, at $21.16.

The company's 6.25% convertible senior debentures due July 15, 2033 (NYSE: GPM) fell 36 cents, or 1.44%, to $24.35

The last of the group, GM's 1.5% convertible senior debentures due May 31, 2009 (NYSE: GRM) moved down 34 cents, or 1.19%, to $28.13.

GM stock (NYSE: GM) took the biggest loss on the day, closing at $36.46, a dip of $1.18, or 3.13%.

Ford's convertibles also fell victim to the profit taking. The Dearborn, Mich.-based car maker's 4.25% convertible senior notes due Dec. 15, 2036 closed at 116.75 versus a closing stock price of $8.63 Thursday. They closed Wednesday at 120.13 versus a stock price of $8.88.

Ford stock (NYSE: F) dropped 25 cents, or 2.82%, on Thursday.

AMR up on investor strife

It's rare that Iceland has much of an effect in world affairs. But an Icelandic private equity firm, FL Group, was able to move if not a market, then at least a couple of issues. FL Group called for strategic changes in Ft. Worth, Texas-based AMR Corp., the parent company of American Airlines, saying they were long overdue.

Apparently investors agreed, as both the stock and convertibles were up. AMR's 4.5% convertible senior notes due Feb. 15, 2024 closed Thursday at 119.85 versus a closing stock price of $22.02. They finished trading Wednesday at 118.294 versus a stock price of $21.77.

AMR stock (NYSE: AMR) was up 25 cents, or 1.15%, on Thursday.

Health care convertibles gain ground...

St. Paul, Minn.-based medical device producer St. Jude Medical saw its convertibles rise as its stock slipped Thursday. St. Jude's 1.22% convertible senior debentures due Dec. 15, 2008 closed Thursday at 102.2 versus a closing stock price of $44.04. They closed Wednesday at 101.824 versus a stock price of $44.14.

Stock in St. Jude (NYSE: STJ) closed down 10 cents, or 0.23%, on Thursday.

Staying in health care, LifePoint Hospitals had a good day all around. The Bentwood, Tenn.-based rural and suburban hospital operator's 3.5% convertible senior subordinated notes due May 15, 2014 closed at 89.32 versus a closing stock price of $30.28 Thursday. They finished trading Wednesday at 87.5 versus a stock price of $29.98.

LifePoint stock (Nasdaq: LPNT) added 30 cents, or 1%, on Thursday.

While semiconductors were mixed

Boise, Idaho-based semiconductor producer Micron Technology saw its convertibles and stock move up Thursday. Micron's 1.875% convertible senior notes due June 1, 2014 closed at 98.99 versus a closing stock price of $11.36. They finished Wednesday at 95 versus a stock price of $10.75.

Micron stock (NYSE: MU) added 61 cents, or a big 5.67%, on Thursday.

Micron's gain may well have been Intel's pain. The Santa Clara, Calif.-based semiconductor firm saw its 2.95% junior subordinated convertible notes due Dec. 15, 2035 close at 104 versus a stock price of $25.76 on Thursday. That was essentially unchanged from Wednesday's close of 104.1 versus a stock price of $25.91.

Intel stock (Nasdaq: INTC) wasn't quite as successful, losing 15 cents, or 0.58%, on the day.

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