PDL BioPharma prices, but market not impressed; AMD convertibles strengthen; Iconix unchanged

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 early in the session, 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.

The Incline Village, Nev.-based biopharmaceutical company said it plans to use proceeds from the deal to repurchase some of its 4% convertible senior notes due 2018. As such, that issue has trended upward.

A market source pegged the paper just south of par on Thursday, which was called a gain of over 4.5 points outright.

The equity underlying the debt was meantime off a nickel, or 1.64%, at $3.00. A trader remarked that the equity had traded quite heavily ahead of the deal’s pricing – about 21 million shares traded, he said – but was not nearly as active on Thursday.

However, with about 3.3 million shares exchange during the session, that was still above average liquidity.

RBC Capital Markets ran the books.

AMD pushed higher

Advanced Micro Devices Inc.’s 2.125% convertible notes due 2026 continued to post gains on Thursday in the wake of news that the company’s server graphics processing chips would be integrated into Google’s cloud platform.

At the bell, a source saw the convertibles trading with a 125 handle, which was a gain of about 10 points on the day.

The stock closed at $8.46, up 79 cents, or 10.3%. The equity saw nearly three times the trading volume than the average.

Earlier in the session, 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 rose 10%.

AMD has fared well in the gaming console arena but until now has failed to take up much market share in the cloud computing genre. With Google’s usage of its FirePro S9300 x2 server GPU, the hope is that the Sunnyvale, Calif.-based company will be able to compete against its closest competitors.

Iconix holds steady

Iconix Brand Group Inc.’s 1.5% convertible notes due 2018 were little changed on Thursday, though the paper had gotten a nice boost on Wednesday.

“[The convertibles] popped up big yesterday after their investor meeting,” a trader said.

The meeting was held Tuesday at 3 p.m. ET. Though it was unclear what was said during the meeting, the company was able earlier this month to spin its earnings into a positive.

A trader saw the bonds at 91.5 early Thursday, though another source saw the paper ending the day at 90.5 bid, 90.75 offered.

That was about unchanged from Wednesday levels. At the beginning of the week, the convertibles were trading around 86.

As for the equity, it was 6 cents weaker at $9.63.

On Nov. 8, the New York City-based brand management company reported earnings that were mixed. The company also guided expectations for the full-year to the lower end of projections.

While the quarterly results initially resulted in a sell-off in the stock, the company was able to point out positive signs during its conference call that pushed the equity – and the bonds – back to where it started.

Mentioned in this article:

Advanced Micro Devices Inc. Nasdaq: AMD

Iconix Brand Group Inc. Nasdaq: ICON

PDL BioPharma Inc. Nasdaq: PDLI

© 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.