Morning Commentary: Radius Health prices, dips below issue price; BioMarin trading actively

By Stephanie N. Rotondo

Seattle, Aug. 9 – Another new issue hit the convertible bond market on Wednesday, as Radius Health Inc. priced $300 million of 3% convertible notes due 2024.

The deal came with an initial conversion premium of 32.5%, at the cheap end of price talk. The yield came in the middle of the 2.75% to 3.25% price talk.

J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are the joint bookrunners. Citigroup Global Markets Inc. is also a bookrunner, and Leerink Partners LLC is a manager.

Post-pricing, a trader said the new bonds – the company’s inaugural convertible deal, in fact – were not doing well, seeing them trade down to 99.5.

The issue came at par.

The company’s stock (Nasdaq: RDUS) wasn’t doing much better, sliding 75 cents, or 2.05%, to $36.08.

Conversions will be settled in common stock, cash or a combination of both, at the company’s option. The initial conversion rate is 20.4891 shares per each $1,000 of notes, equal to an initial conversion price of $48.81 a share.

Meanwhile, BioMarin Pharmaceutical Inc.’s $450 million of 0.599% convertible notes due 2024 – a deal priced late Monday – remained in play, according to a trader.

The trader pegged the notes in a 97 to 97.25 context, down a shade from the previous session.

The issue came at 98% of par.

As for the company’s stock, it was also a touch lower in early trading.

BofA Merrill Lynch led the deal, with JPMorgan and Goldman Sachs & Co. acting as joint bookrunners.

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