Medicines adds, Resource Capital slips in gray market; Brocade launches $500 million deal

By Rebecca Melvin

New York, Jan. 7 – The Medicines Co.’s planned $300 million of seven-year convertible bonds was seen a little higher in the gray market on Wednesday at par plus 0.5 point to a point ahead of final terms being fixed.

Market players were also sizing up Resource Capital Corp.’s planned $100 million of five-year convertibles, which were expected to price after the market close as well, but those bonds were said to have traded down in the gray market at 99.125.

Also in the primary market, former convertibles issuer Brocade Communications Systems Inc. launched an offering of $500 million of five-year convertible bonds after the market close that was seen pricing late Thursday.

After the new Medicines deal was launched, the Parsippany, N.J.-based health care company’s existing 1.375% convertibles due 2017 traded down to about 108 from 110 previously, a New York-based sellside source said.

Medicines shares also traded down and were at about $24.24, or down 4%, versus the bonds at 108 to 109. But the shares pared losses during the session, ending down only 48 cents, or 1.9%, at $24.79.

Resource Capital’s existing 6% convertibles were not heard in trade on Wednesday, but a small amount changed hands on Tuesday at 97.75, a syndicate source said.

Shares of Resource Capital, a New York-based specialty finance company primarily focused on commercial real estate loans, dropped 18 cents, or 3.6%, at $4.85 following the launch of the convertible offering.

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