Apollo, Insulet to price new deals, NXP Semiconductors makes gains

By Rebecca Melvin and Abigail W. Adams

Portland, Maine, Nov. 6 – Insulet Corp. and Apollo Commercial Real Estate Finance, Inc. announced plans after market close on Monday to price new convertibles.

Insulet plans to price $300 million of seven-year convertible notes that were talked to yield 1.37% to 1.875% with an initial conversion premium between 25%-30%, according to a market source.

Morgan Stanley and Wells Fargo Securities are joint bookrunners for the rule 144A deal, which is expected to price after market close on Tuesday. The notes are non-callable for four years and then provisionally callable if shares exceed 130% of the conversion price.

Apollo plans to price a $75 million add-on to its 4.75% convertible senior note due 2022 at 100.25 to 100.5, according to a market source. The initial conversion premium will be 10%. The notes are non-callable with no puts.

Morgan Stanley & Co. LLC, BofA Merrill Lynch, Credit Suisse, and J.P. Morgan Securities LLC are the joint bookrunners for the offering, for which there is a greenshoe for up to an additional $11.25 million of notes. Deutsche Bank Securities, JMP Securities and Keefe, Bruyette & Woods Inc. are the co-managers.

Apollo priced the original $230 million of convertibles on Aug. 15.

NXP Semiconductors gains

NXP Semiconductors NV’s 1% convertible senior notes due 2019 continued to make gains on Monday in the wake of Broadcom Ltd.’s bid for Qualcomm Inc., which is already planning to acquire NXP.

NXP’s convertible was actively trading on Monday with prices between $123.2 and $123.75, according to Trace data, up from $122.90 at the close on Friday. The notes had gained by 0.5 point outright in an uptick in trading on Friday.

The 1% issue has $1.15 billion outstanding.

Qualcomm is proposing to buy NXP at a price of $110.00 per share, an acquisition announced in October 2016 and currently expected to close later this year or early in 2018.

Broadcom announced an unsolicited bid for Qualcomm on Monday morning, which at $130 billion would be the largest tech deal in history.

In its announcement, Broadcom said its offer would stand whether Qualcomm completes the purchase of NXP or not.

The deal carries a $5 billion convertible debt financing commitment from Silver Lake Partners, a Calif.-based equity investment firm focused on technology, according to Broadcom’s investment presentation. Sources queried could not speak to takeover protections attached to the note.

Molina Health Care

Trading of Molina Health Care Inc.’s 1.125% convertible due 2020 tempered on Monday, after a flurry of trading activity on Friday. The note gained 7 points on an outright basis, closing at 195.43 on Friday.

With Molina stock up 14%, the 1.125% convertible contracted 0.25 to 0.375 points on swap on Friday, a market source said. There was little interest in the bond on Monday with only one recorded trade at an outright price of 194.91, according to trace data.

Molina Health Care, Inc.’s 1.625% convertible due 2044 made large gains in heavy trading on Friday, rising over 10 points to 138.86, according to trace data. While trading tempered, the convertible continued to make gains on an outright basis, reaching a high of 139.27 just before market close, according to trace data.

The price slumped by 4 points to 135.5 in a trade executed after 4 p.m. After making gains throughout the day, Molina stock also slumped at market close, decreasing by 0.20 percent.

Iconix Rebounds

After a downward spiral with prices reaching as low as 59 last week, Iconix Brand Group Inc. continued to rebound on Monday. Iconix 1.5% convertible due March 2018 continued to see heavy trading and closed at a high of $86.71, according to trace data.

Trades had been in the $83 range at mid-day, according to market sources. Iconix stocks and convertibles plummeted last week after the company announced an amendment to its credit agreement out of concern it would not be able to make its 2018 debt payments.

The move was prompted by the loss of its retail license agreement with Walmart for its DanskinNow brand of women’s active wear.

“It was largely overdone,” a trader said, of the headlines surrounding the company. “Investors are getting more comfortable with their ability to pay back their debts.”

The secondary market was otherwise quiet on Monday with trading mostly revolving around “on the run” names like Intel Corp. and Citrix Systems, a market source said.

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