Morning Commentary: Cypress Semiconductor prices new issue, bonds gain; Lam also trades up

By Stephanie N. Rotondo

Seattle, June 21 – Cypress Semiconductor Corp. priced a $250 million offering of 4.5% convertible senior notes due 2022 on Tuesday.

Upon pricing, a trader said the new issue was taking up the bulk of the day’s trading activity.

He placed the paper in a 104 to 104.5 context. That compared to a stock price of $10.10, which was off 8 cents in early trading.

“They were bid up there pretty quickly this morning,” he said of the new debt.

The convertible bonds are convertible into common stock at an initial conversion rate of 74.1372 shares per $1,000 of notes. That equates to $13.49 per share, an initial conversion premium of 32.5%.

The deal was initially talked at a coupon of 4.5% to 5% and an initial conversion premium of 27.5% to 32.5%, according to a syndicate source.

BofA Merrill Lynch and Credit Suisse Securities (USA) LLC ran the books.

Lam Research Corp., another semiconductor name, was also on the busier side in an otherwise muted trading session.

The 1.25% convertible notes due 2018 were trading with a 147 handle at mid-morning, up ˝ point to 1 point. The equity was up 29 cents at $84.57.

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