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Morning Commentary: AMAG convertibles skyrocket on buyout rumors; j2 Global active
By Abigail W. Adams
Portland, Me., Oct. 1 – Despite a lack of new paper, the convertibles secondary space was active early in Thursday’s session with company news pushing outstanding issues into the spotlight.
There was $96 million in reported volume about one hour into the session, a market source said.
AMAG Pharmaceuticals Inc.’s 3.25% convertible notes due 2022 dominated the tape with the notes skyrocketing on an outright basis as stock soared following buyout rumors.
The 3.25% convertible notes were up more than 7 points outright with stock up more than 40%.
The notes were changing hands at 97.125 early in the session with more than $10 million in reported volume, according to a market source.
AMAG stock traded up to $13.44, an increase of 42.98%, shortly before 11 a.m. ET.
Stock skyrocketed on market rumors that Apollo Global Management is eyeing the company for a potential takeover.
AMAG’s convertible notes are not equity sensitive with the conversion premium on the notes still over 100% even with the run up in stock.
j2 Global Inc.’s 1.75% convertible notes due 2026 were also active early in Thursday’s session following news the company plans to price a high-yield bond.
The 1.75% notes traded up 1 point outright to 90.5.
There was about $8.5 million in reported volume early in the session.
Stock was changing hands at $69.86, an increase of 0.92%, shortly before 11 a.m. ET.
Holders were most likely selling the convertible notes to participate in the junk bond offering, a source said.
j2 Global plans to price $1.2 billion of 10-year senior notes (existing Ba3/BB) on Friday, Prospect News reported.
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