Midday Commentary: Imperial Holdings gains in modest trade; planned Akamai sees par bid

By Rebecca Melvin

New York, Feb. 13 - Imperial Holdings Inc.'s newly priced 8.5% convertibles gained in modest trading in the secondary market on both an outright and hedged basis Thursday after the Boca Raton, Fla.-based specialty finance company priced $70 million of the five-year convertibles at the rich end of price talk.

The new Imperial bonds opened up at 104 bid, 107 offered and gained from there to 105.5 bid, 108.5 offered, a syndicate source said. Shares were higher by nearly 3% in early action.

The new deal was small and didn't "set up great on a hedged basis" due to limited borrow and light daily trading volume, but it is a company with "an interesting fundamental story and the book reflected that," the syndicate source said.

Market players were sizing up Akamai Technologies Inc.'s $500 million deal of five-year convertible senior notes, which were expected to see final terms after the market close. One trader saw only one market in it, however, and it was an issue bid, he said.

A second trader said that he saw the paper worth par at the midpoint of talk, using a credit spread of 175 basis points over Libor and a 33% vol.

Elsewhere, trading was subdued in the early going, market sources said. Goldcorp Inc.'s convertibles weren't seen to have traded yet after the Vancouver, B.C.-based mining company reported earnings that missed estimates, but shares were up 2.6%.

Goldcorp's 2% convertibles due 2014 were seen wrapped around 100.5, a New York-based trader said.

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