AMR gains altitude as judge sets November anti-trust court date; Dendreon notes higher

By Stephanie N. Rotondo

Phoenix, Aug. 30 - Convertible bonds were subdued Friday as many market players took early advantage of the upcoming three-day Labor Day weekend.

"All the people that were in were doing month-end quotes," one trader noted.

AMR Corp.'s convertible bonds continued to creep higher as a federal judge scheduled a November trial date for the Justice Department's anti-trust suit against the company and its merger partner, US Airways.

Justice had previously asked for a March trial date.

Meanwhile, Dendreon Corp.'s convertibles were ticking up slightly, even as its stock was slipping. On Wednesday, RBC Capital's Michael Yee published a note in which he said the "best and easiest" solution for the company was a partnership or asset sale.

AMR gaining altitude

AMR's benchmark 6.25% convertible notes due 2014 were "up a touch," a trader said, pegging the issue in a 100.5 to 101 context.

That compared to 100 to 100.25 on Thursday.

Another trader also placed the issue around 100.5, which he said was up about half a point.

Both traders noted that trading in the name was thin.

A third trader quoted the convertibles at 100.5 bid, 100.875 offered.

The stock ended the day up 15 cents, or 4.42%, at $3.54.

The second trader said the slight gain was due to a federal judge setting a November trial date for the company's anti-trust lawsuit. The Justice Department filed the suit against AMR and US Airways in mid-August, just as bankrupt AMR was slated to have its plan of reorganization approved.

The plan is centered on the merger with US Airways. For its part, Justice was said to be seeking a March date for the trial, but judge Colleen Kollar-Kotelly scheduled the show for Nov. 25.

"March 3, I think, is too far off. It needs to be a tighter, expedited schedule," the judge said in court.

Earlier in the week, Justice and the two companies indicated in court filings that they would be willing to settle the suit, which would allow the merger to go through.

Dendreon inches up

A trader said Dendreon's 2.875% convertible notes due 2016 were "slightly better" at 65.25 bid.

"It could just be some guy bidding up for month-end," the trader said.

Another trader placed the issue at 64.75 bid, 65 offered, though he added that most of the trades were small retail prints.

On Wednesday, RBC analyst Yee said it was 30% likely that the Seattle-based pharmaceutical company would either form a partnership within Europe or possibly sell some assets.

If the company were to be sold, he said, the offered price per share would probably not be much higher than the current trading price.

Yee lowered his price target on the shares to $3.00 from $5.00.

The stock dropped 7 cents, or 2.41%, ending at $2.84.

Mentioned in this article:

AMR Corp. OTC Markets: AAMRQ

Dendreon Corp. Nasdaq: DNDN

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.