Teva debt active; Micron, Intel firm on new chip; Whiting bonds rebound ahead of earnings

By Stephanie N. Rotondo

Phoenix, July 28 – Teva Pharmaceutical Industries Ltd.’s 0.25% convertible notes due 2026 continued to see active trading on Tuesday following Monday’s announcement that the Israeli company had made a $40.5 billion offer for Allergan plc’s generic drug unit.

“They are number one again,” a trader said.

The notes traded as high at 170 early in the session but came back in to trade with a 168 handle.

The stock, which had run up over 16% on Monday, was slipping a bit, falling 59 cents to $71.41.

Teva, an Israeli company, will pay $33.75 billion in cash and $6.75 billion in stock for the asset. The acquisition is expected to increase Teva’s place among generic drug manufacturers.

The deal is expected to close in the first quarter of 2016.

On the news, Moody’s Investors Service cut Teva’s senior unsecured ratings to Baa1 from A3 on Monday, noting that the ratings will remain under review. The downward revision was attributed to Teva’s aggressive financial policies and increased leverage.

Come Tuesday, Standard & Poor’s followed suit, dropping its corporate rating on Teva to BBB+ from A-.

Micron, Intel unveil new chip

Micron Technology Inc. and Intel Corp. convertible bonds continued to move higher Tuesday after the two companies held a press event to discuss a new memory chip the parties collaborated on.

Micron’s 3% convertible notes due 2023 moved up to 95.75, an outright gain of about 4 points. Intel’s 2.95% convertible notes due 2035 meantime rose nearly 3 points to 117.75.

The stocks were also heading higher.

Micron’s equity put on $1.64, or 9.04%, to $19.76. Intel’s stock earned 61 cents, or 2.15%, closing at $28.96.

On Monday, the companies announced a press event for Tuesday but didn’t specify what it was for. Speculation was that it could be in regards to a rollout of a new NAND chip.

As it turns out, the speculation was close to the mark.

The companies lauded their creation of 3D XPoint, a non-volatile class of chip that works up to 1,000 times faster than flash memory. The chip can also hold about 10 times as much data as dynamic random access memory.

Whiting up, Alpha eyed

Whiting Petroleum Corp.’s 1.25% convertible senior notes due 2020 were rallying, a trader said.

The trader saw the paper at 87, up from early lows around 85.

The $1 billion issue priced in late March and traded well on its debut, pushing up past par. But as oil prices have declined, so have the notes.

The Denver-based company is slated to bring earnings after the market closes on Wednesday. Ahead of the results, the company’s equity (NYSE: WLL) was moving up 53 cents, or 2.51%, to $21.66.

Aside from Whiting, however, a trader said there was very little going on in oil and gas credits, especially those deemed distressed.

“There’s no bid for any of that stuff,” he said.

Elsewhere in the commodity realm, the market is expecting that Alpha Natural Resources Inc. will not take out its 3.25% convertible notes due Aug. 1, given speculation the company is headed for bankruptcy.

“They are 34 points below face value with three days to go,” a trader said. “Do you think they get paid? I don’t.”

Mentioned in this article:

Alpha Natural Resources Inc. OTC: ANRZ

Intel Corp. Nasdaq: INTC

Micron Technology Inc. Nasdaq: MU

Teva Pharmaceutical Industries Ltd. NYSE: TEVA

Whiting Petroleum Corp. NYSE: WLL

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