Morning Commentary: New Anacor up slightly on an outright basis; new Gran Tierra adds

By Rebecca Melvin

New York, April 1 – Anacor Pharmaceuticals Inc.’s newly priced 2% convertibles due 2023 traded up slightly on an outright basis on Friday after the $250 million issue of seven-year notes priced at the midpoint of talk.

The new 2% convertibles printed at 101.375, according to the Trace data tape. But the Anacor shares were bouncing strongly, so on a swap basis, the bonds didn’t appear to have done much. Ahead of pricing, the Anacor bonds looked about 2 points cheap at the midpoint of talk.

Anacor shares were last up $4.00, or 7.5% at $57.52, after they fell 9% on Thursday on the heels of the new deal launch.

The strong stock move can mean several things when it relates to a convertibles deal, a New York-based trader said.

“Sometimes people sell off a stock when the convertible is announced under the assumption that people will be shorting it. In this case, there is no open market shorting, so that would have been an error. Or sometimes the pricing exposes new people to the ‘story’ surrounding the stock and that creates buyers,” the trader said.

Also in primary market action, Gran Tierra Energy Inc.’s 5% convertibles due 2021 traded at 100.5, according to Trace data. Shares of the Calgary, Alta.-based energy company were down a dime, or 4%, at $2.37.

Gran Tierra priced $100 million of the five-year notes at mixed terms compared to talk.

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