Ford active, weaker after debut; Jakks Pacific trades over par; MasTec quiet; Incyte gains

By Rebecca Melvin

New York, Nov. 5 - Two new convertibles issues that hit the secondary market Thursday weren't heard much in trade, likely due their small size. But Ford Motor Co., which priced $2.5 billion of convertibles on Wednesday, remained active albeit at slightly lower levels from their debut, according to sources.

Jakks Pacific Inc.'s newly priced 4.5% convertibles due 2014 were mostly quiet, but trades above par early on were reported. The new Jakks paper was 100.625 bid, 101.625 at 10 a.m. ET, a New York-based sellside analyst said.

MasTec Inc.'s newly priced 4.25% convertibles due 2014 were also quiet.

"Nothing's printing in those names," a New York-based sellside trader said. "I'm not hearing either one of them. They're too tiny."

Jakks priced $85 million and MasTec priced $100 million of five-year convertibles.

Incyte Corp. was stronger after the Wilmington, Del.-based biotechnology company posted a narrower third-quarter loss amid lower costs.

Also in trade were Eastman Kodak Co. convertibles, which traded at 84.5 versus a share price of $4.05. Shares of the Rochester, N.Y.-based photography and printing company jumped 13% on the day to $4.19.

Stocks were giddy on Thursday amid positive productivity and jobs data as well as favorable retail sales numbers for October and an upbeat forecast from Cisco Systems Inc.

The Labor Department said the number of jobless claims fell to 512,000 last week, the lowest level since January and fewer than economists had forecast.

The Dow Jones Industrial Average jumped 204 points, or 2%, to 10,005.96; the S&P 500 index gained 20 points, or 1.9%, at 1,066.63; and the Nasdaq Stock Market rose 49.8 points, or 2.4%, to 2,105.32.

Ford trades actively, eases

Ford's newly priced 4.25% convertibles due 2014 were trading down about 0.5 point, according to one sellsider. A second source said they were down 0.125 point on the day.

The new Ford 4.25s were trading at 99.75 with the stock at $7.42 or $7.43, while another source reported trades at 99.75 versus a slightly lower $7.40 share price.

"They were par lock yesterday and higher earlier, versus $7.35," a sellsider said.

The old Ford 4.25% convertibles due 2036 were at 100.5, which was also weaker on the day.

Shares of the Dearborn, Mich.-based automaker added 18 cents, or 2.5%, to $7.45 in heavy volume.

On Wednesday, the Ford paper traded right around par for most of the day as its underlying shares slipped.

Jakks Pacific trades over par

Jakks' newly priced 4.5% convertibles due 2014 were quoted at 100.625 bid, 101.625 offered even as its underlying shares eased slightly.

Shares of the Malibu, Calif.-based toy and leisure products company shed 18 cents, or 1.5%, to $11.76 in heavy volume.

Jakks priced $85 million of convertibles at the point of revised talk for the coupon and at the rich end of revised talk for the premium, which was 30% to 32.5%.

Original talk was for a coupon of 4.25% to 4.75% and for a 25% to 30% premium.

Proceeds, together with cash on hand, will be used to repurchase all or some of its 4.625% convertible senior notes due 2023. Those bonds were sold in June 2003 via bookrunner Bear Stearns & Co. Inc.

The new notes are non-callable with no puts. There is contingent conversion at a price hurdle of 130%. There is also dividend and takeover protection. And upon conversion, the notes may be settled in cash, shares or a combination of the two.

MasTec prices at midpoint of coupon talk

MasTec priced $100 million of five-year convertible senior notes after the close Wednesday to yield 4.25% with an initial conversion premium of 32.5%, according to a news release.

The Rule 144A deal priced at the midpoint of talk for the coupon, which was 4% to 4.5%, and at the rich end of talk for the initial conversion premium, which was 27.5% to 32.5%.

The five-year bullets, with no puts, were sold via joint bookrunners Morgan Stanley & Co. and Barclays Capital Inc.

Proceeds are intended to fund a previously announced acquisition of Precision Pipeline LLC and Precision Transport Co. LLC and for general corporate purposes.

The convertibles will be guaranteed by MasTec subsidiaries that guarantee MasTec's existing senior notes due 2017 and existing senior convertible notes due 2014.

MasTec is a Coral Gables, Fla., telecommunications and energy infrastructure company.

Incyte strengthens

Incyte's 4.75% convertibles due 2015 traded at 104.5 versus a share price of $6.60, which compared to 100 versus a share price of $6.00 on Monday.

Shares of Incyte added 49 cents, or 7.7%, to $6.85 on Thursday.

The Wilmington, Del.-based biotech reported a net loss for the quarter ended Sept. 30 of $43.4 million, or 44 cents per share, compared to a loss of $44.8 million, or 48 cents a share, for the same period a year earlier.

The most recent results included a $5.4 million non-cash expense related to a loss on retirement of some of its 3.5% convertible senior notes due 2011 and 3.5% convertible subordinated notes due 2011, as well as a $2.2 million non-cash expense related to the impact of expensing share-based payments.

Revenue for the quarter fell to $939,000 from $1.1 million a year earlier.

The company is developing treatments for breast cancer, arthritis and bone marrow diseases.

Mentioned in this article:

Eastman Kodak Co. NYSE: EK

Ford Motor Co. NYSE: F

Incyte Corp. Nasdaq: INCY

Jakks Pacific Inc. Nasdaq: JAKK

MasTec Inc. NYSE: MTZ

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