Midday Commentary: American Residential adds on debut; new Forestar, GAIN Capital quiet

By Rebecca Melvin

New York, Nov. 22 -American Residential Properties Inc.'s newly priced 3.25% exchangeable senior notes traded better at 101.5 bid, 102.5 offered early Friday after the Memphis, Tenn.-based heating, air conditioning, ventilation and plumbing services provider priced $100 million of the five-year notes at the cheap end of talk, according to a market source.

American Residential shares were up about a nickel, or 0.3%, to $17.39.

Also new to the convertibles market on Friday were Forestar Group Inc.'s $135 million of 6% tangible equity units, which priced at the midpoint of talked terms, and GAIN Capital Holdings Inc.'s upsized $70 million of 4.125% convertible senior notes, which priced at terms that were mixed compared to talk.

Those new convertibles were quiet in secondary market action. But shares of Forestar, an Austin, Texas-based real estate, mineral and fiber resources company, were up 65 cents, or 3.4% at $19.74 at late morning; and shares of GAIN Capital, a Bedminster, N.J.-based trading services provider, were unchanged at $8.88.

Back in established issues, trading activity in the convertibles market was described as "dead" by several market players. Forestar Group's existing 3.75% convertibles due 2032 showed up on the Trace tape, changing hands at 108.875. A previous level for that convertible wasn't known.

Also BioMarin Pharmaceutical Inc.'s dual tranches, including a 0.75% convertible due 2018 and a 1.5% convertible due 2020, which priced in early October, were seen in trade at 107.9 and 109, respectively, according to Trace data.

On Nov. 19, a panel of the Food and Drug Administration recommended that BioMarin's Vismizim for patients with a rare genetic disorder that causes skeletal malformation be approved for sale in the United States. That drug is up for a ruling by the FDA at the end of February. Getting one step closer to regulatory approval makes BioMarin more attractive to potential acquirers.

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