Midday Commentary: New Iridium preferreds add on swap with common higher; Molycorp slide continues

By Rebecca Melvin

New York, May 9 - Iridium Communications Inc.'s newly priced 6.75% perpetual convertible preferreds traded higher in the early going on Friday after the McLean, Va.-based mobile satellite service company priced $125 million of the new securities at the cheap end of coupon talk and at the midpoint of premium talk.

The new Iridium preferred was seen in the high $260 to low $270 range, compared to its $250 per share liquidation preference price, versus the underlying common stock, which was up about 6% in the early going.

"It's moving around a lot as every nickel move is worth $3 in the bonds. But it's up on swap by about 4%," a syndicate source said.

The Iridium shares were last seen up 36 cents, or 5.9%, to $6.49.

Iridium was a centerpiece of trade in the convertibles market, but elsewhere, Molycorp Inc.'s convertibles extended their losses after a sharp drop on Thursday.

Molycorp's 3.25% convertibles due 2016 were seen down another 3 points to 71 following a 3- to 4-point drop to 74 on Thursday. The underlying shares fell another 16% early Friday after an 18.5% drop on Thursday on weaker-than-expected quarterly results.

Molycorp is a Greenwood Village, Colo.-based mining company.

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