Morning Commentary: Dynegy’s new tangible units fly higher; BioMarin trends up on Sanofi rumors

By Stephanie N. Rotondo

Seattle, June 17 – Dynegy Inc.’s new $400 million of 7% tangible equity units were “flying” in early Friday trading, according to a trader.

He said the units – which came in line with the 6.625% to 7.125%, up 22.5% to 27.5% price talk on Thursday – were trading in a 106 to 107 range. As for the stock underlying the units (NYSE: DYN), it was “up about a dollar,” he said.

At mid-morning, the equity was up 76 cents, or 4.74%, at 16.79.

Dynegy plans to use proceeds from the new issue to fund an acquisition.

Meanwhile, BioMarin Pharmaceutical Inc.’s equity was also ticking higher, leading the 1.5% convertible notes due 2020 into higher territory as well.

“They are up on rumored Sanofi interest,” a trader said, noting a Bloomberg report that indicated Sanofi was eyeing BioMarin as a takeover alternative to Medivation.

The bonds were trading at “119 and change, 120,” a trader said. The stock (Nasdaq: BMRN) was up over $2 at $82.99.

However, the trader pointed out that the stock had traded as high as $85 earlier in the session.

“So it’s already coming in,” he said. “Nobody believes the rumors.”

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