Morning Commentary: Anthem strengthens after upsizing; HeartWare prices, exchanges old bonds

By Rebecca Melvin

New York, May 7 – Anthem Inc.’s newly priced 5.25% convertible equity units traded up on Thursday after the Indianapolis-based health benefits company priced an upsized $1,175,000,000 of the three-year units at the rich end of talked terms.

The Anthem 50 par units were quoted at 50.875 bid, 51.25 offered on an outright basis by a syndicate source at late morning.

Shares were lower by about 1.75% at $157.00, so the new units were “definitely better on swap,” the source said.

So far the new Anthem paper traded as high as 51.5 and as low as 50.75. On a 100 par basis, that would be considered about 102.

The Anthem deal was upsized from $900 million.

Anthem’s older 2.75% convertibles traded very actively and were down by about 5 points at 210, according to Trace data.

Also in primary action, HeartWare International Inc. priced $148 million of 6.5-year convertible bonds with a 1.75% coupon and 30.5% initial conversion premium.

HeartWare shares were down $2.84, or 3.7%, at $73.76 in early action.

Back in established issues, Priceline Group Inc.’s convertibles were lower on an outright basis – shares were also down – after the Norwalk, Conn.-based internet travel services company reported earnings that were in line with expectations but guided lower for the current quarter, citing currency exchange rates.

Priceline’s 0.35% convertibles due 2020 traded down 2.5 points to 115.8, and Priceline’s 1% convertibles due 2018 traded down 5.3 points to 136.5, according to Trace data.

Priceline shares had been as much as 7% lower in the early going but were last down $42.10, or 3.3%, at $1,222.05.

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