Morning Commentary: Trading thins as holidays lure players out of the office; NXP convertibles firm

By Stephanie N. Rotondo

Seattle, May 31 – Holidays continued to weigh on an already tepid convertible bond market on Wednesday.

A trader noted that the day marked the beginning of the Jewish holiday Shavuot.

“So there’s a lot of people out,” he said.

Compounding that was the fact that it was already a shortened holiday week, given Memorial Day on Monday. The trader said some desks were empty because players opted to just take the whole week off.

While overall liquidity was underwhelming, NXP Semiconductors NV’s 1% convertible notes due 2019 were in play early Wednesday.

A trader pegged the paper in a 199.25 to 119.5 context. Another market source echoed that level, deeming it up about a point.

The underlying equity (Nasdaq: NXPI) was up over 1% in early trading.

The upward move came as Qualcomm Inc. extended its cash tender offer for NXP’s common stock. The tender is being done as part of a purchase agreement inked back in October.

Qualcomm is paying $110.00 per share in the tender. The deadline was extended to 5 p.m. ET on June 28.

However, as of Tuesday, only 14.1% of all outstanding NXP stock had been validly tendered. Perhaps the lackluster response was not all that surprising, as some NXP investors – including Elliott Management Corp. – are trying to persuade NXP to renegotiate its deal with Qualcomm.

© 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.