Morning Commentary: Medicines launches $350 million convertibles; Weatherford moves higher

By Rebecca Melvin

New York, June 6 – The Medicines Co. was in focus in U.S. convertibles in the early going on Monday after the Parsippany, N.J.-based health care company launched an offering of $350 million of seven-year convertible senior notes ahead of the market open for pricing after the market close.

A portion of the proceeds will be used to repurchase about $220 million of Medicines’ existing 1.375% convertible notes due 2017. Those bonds, which are being tendered in privately negotiated transactions, were not heard to have traded in early action. But the existing Medicines’ 2.5% convertibles were trading actively and quoted at 128.673 versus an underlying share price of $37.89.

Medicines shares were up nearly 1% at late morning.

The new bonds were talked to yield 2.5% to 3% with an initial conversion premium of 27.5% to 32.5%, according to market sources. The Rule 144A deal was being marketed via Goldman Sachs & Co. and J.P. Morgan Securities LLC as joint bookrunners, and the deal has a $52.5 million greenshoe.

Elsewhere Weatherford International Ltd.’s $1.1 billion 5.875% exchangeable, which debuted in the market last week, was up again in good volume, as shares continued to rise.

The Weatherford exchangeables traded up about 4 points, changing hands at 116.625 early Monday with shares at $6.50, which were up about 40 cents, or 6.8%.

On Friday, the Weatherford exchangeables were near 112 at the end of the trading session.

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