Ctrip.com trades a little over par despite lower shares; Inphi bond adds; Retrophin surges

By Rebecca Melvin

New York, Sept. 7 – Two new deals in the U.S. convertibles market traded in line to a little better out of the chute upon release for secondary dealings on Wednesday.

“Both deals seem to have been taken in and absorbed by the market pretty well,” a New York-based trader said.

The new Ctrip.com International Ltd. 1.25% convertibles due 2022 were trading around 100.875 at late morning against shares that were lower. The Shanghai-based travel services provider priced an upsized $900 million of the new senior notes at the rich end of talked terms.

The deal came concurrently with an upsized 28.5 million American Depositary Shares. The shares were down 67 cents, or 1.5%, at $45.275 at late morning and closed down $1.01, or 2.2% to $44.95.

Ctrip.com’s older convertible issues all traded somewhat and were lower in line with the underlying shares, a trader said.

Inphi Corp.’s newly priced 0.75% convertibles due 2021 traded up to 101.875 after the Santa Clara, Calif.-based communications chip maker priced an upsized $250 million of the five-year senior notes at the rich end of coupon talk and at the midpoint of premium talk.

Inphi’s common shares were down 38 cents, or 0.9%, at $41.35 at late morning and closed down 55 cents, or 1.3%, to $41.18.

Internationally, Cofinimmo SA priced €219.3 million of five-year convertible bonds to yield 0.1875% with an initial conversion premium of 27.4%. Proceeds of the new deal were being used to buy back Cofinimmo’s older 2% convertibles due 2018, which were indicated up about 4 points to about 131, compared to 126.7 previously, according to a market source.

The new deals priced after a flurry of launches on Tuesday, which marked what was essentially the reopening of financial markets following the slow summer period. But while new deals traded after their terms were set, there was no further paper launched into the market on Wednesday, forcing observers to wonder whether it was a one-off pop in activity or a trend toward a more elevated pace of issuance.

Still to come are Insulet Corp.’s $250 million deal of five-year convertible bonds and Advanced Micro Devices Inc.’s $450 million of 10-year convertible bonds that were expected to price on Thursday. But there were no further deals unveiled on Wednesday.

Back in established issues, Retrophin, Inc.’s 4.5% convertibles were indicated up at 139.5 on Wednesday from a previous level of 116.3. The move was in tandem with a surge in the underlying shares of the San Diego-based biopharmaceutical company to $20.81, which was up $4.49, or 28%, on the day.

Sparking the gush upward was news that the company had positive top-line results from a mid-stage study of a treatment for a rare kidney disorder. The drug, sparsentan, exceeded expectations for efficacy and safety, which helps support a view that the drug may be up for possible accelerated approval.

New Ctrip bonds edge up

Ctrip.com’s new 1.25% convertibles due 2026 edged up above par after the upsized $900 million issue saw its terms fixed at the rich end of talk.

The stock was bouncing around but the paper was at least flat or somewhat better, market sources said.

“There’s demand for paper,” a trader said about the new issue.

As for the older existing convertibles of Ctrip.com, there was a bit of trading but not that much.

“I was expecting them to trade more. Each of them is trading a little bit, and they look like they are basically in line,” a New York-based trader said.

Ctrip.com’s 1.25% convertibles, or the B tranche, due 2018 changed hands at 128.8 on Wednesday, which was little changed from where they were trading previously.

Ctrip.com priced an upsized $900 million of the new six-year convertible senior notes after the market close on Tuesday at par to yield 1.25% with an initial conversion premium of 42.5%.

The Rule 144A and Regulation S deal was upsized from an initially talked $750 million in size. Pricing came at the rich end of talked terms, which were for a 1.25% to 1.75% coupon and 37.5% to 42.5% premium.

Concurrently with the pricing of the deal, Ctrip.com is closing a private deal with a subsidiary of the Priceline Group Inc., Ctrip.com’s existing shareholder, for $25 million aggregate principal amount of the new convertible notes due 2022.

Also concurrently with the convertibles deal, Ctrip.com priced an upsized 28.5 million American Depositary Shares at a price of $45.96 per share. The offering was upsized from an initially talked 22.5 million of shares.

Proceeds from the notes and the concurrent private placement of convertible notes to the strategic shareholder are earmarked for organic growth of Ctrip.com’s business, acquisitions of and investments in complementary businesses and assets, and other general corporate purposes.

New Inphi adds

Inphi’s new 0.75% convertibles due 2021 traded up to 101.875, compared to the common shares of the Santa Clara, Calif.-based communications company, which were down 38 cents, or 0.9%, at $41.35.

Given that the shares were down and the Inphi deal is slightly more equity sensitive than the Ctrip.com deal, the Inphi deal looked to be doing slightly better than Ctrip.com, a trader said.

Inphi shares, which fell 4% upon the deal launch on Tuesday, closed off $1.80 at $41.73.

The company priced an upsized $250 million of five-year convertible senior unsecured notes at par late Tuesday to yield 0.75% and with an initial conversion premium of 35%.

Pricing came at the rich end of 0.75% to 1.25% coupon talk and at the midpoint of 32.5% to 37.5% premium talk for the Rule 144A deal that was initially talked at $200 million in size.

Inphi is an analog/mixed signal communications chip maker.

Mentioned in this article:

Advanced Micro Devices Inc. NYSE: AMD

Cofinimmo SA Brussels: COFB

Ctrip.com International Ltd. Nasdaq: CTRP

Inphi Corp. Nasdaq: IPHI

Insulet Corp. Nasdaq: PODD

Retrophin Inc. Nasdaq: RTRX

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