Morning Commentary: PDL BioPharma prices, but market not impressed; AMD convertibles strengthen

By Stephanie N. Rotondo

Seattle, Nov. 17 – The convertible bond market did not appear to be taking PDL BioPharma Inc.’s new $150 million issue of 2.75% convertible senior notes due 2021 very well, a trader reported Thursday.

“There is virtually no activity,” he said, adding that total volume at mid-morning was around $155 million, including the new issue.

“Any convertible bond that comes to market today should be well-received because we haven’t had any in forever,” he said. Oddly enough, the market seemed to be giving the deal a “thumbs-down.”

The trader said small-sized trades were happening in a 99.25 to 99.5 range.

“I never saw plus bids or anything,” he noted.

The trader was not sure why exactly the market was shying away from the deal, which carries a 25% conversion premium.

“I don’t know if it is an issue with the company or what,” he said.

That being said, with the paper not convertible until maturity, that could be keeping investors at bay.

“If you cannot convert it, that is a problem for these guys,” he said.

The equity underlying the debt (Nasdaq: PDLI) was off 4 cents, or 1.48%, at $3.01. A trader remarked that the equity had traded quite heavily ahead of the deal’s pricing but was thus far not as active early Thursday.

RBC Capital Markets ran the books.

In secondary trading, Advanced Micro Devices Inc.’s 2.125% convertible notes due 2026 continued to post gains.

A trader saw the issue at 122.25 against a share price of $8.25.

The paper had traded up to 115 in the previous session, as the stock (Nasdaq: AMD) rose 10%. The gains were attributed to news that AMD was trying to gain momentum in the cloud computing sector.

© 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.