Inotek Pharmaceuticals launches $50 million convertibles; MGIC firms on repurchase plans

By Stephanie N. Rotondo

Seattle, Aug. 1 – The convertible bond market kicked off the week with a planned new issue from Inotek Pharmaceuticals Corp.

The company said Monday that it was issuing $50 million of new convertible notes due 2021, with price talk set at 5.5% to 6%, up 15% to 20%.

Cowen & Co. LLC is the bookrunner.

In the wake of the new issue announcement, Inotek’s stock was in freefall, declining $2.79, or 29.43%, to $6.69.

The Lexington, Mass.-based biopharmaceutical company received a combination patent on its trabodenoson drug just last week.

Among existing issues, MGIC Investment Corp. said Monday that it planned to buy back some of its 2% convertible senior notes due 2020, as well as possibly some of its 9% convertible junior subordinated notes due 2063.

There is $500 million of the 2% notes outstanding and $256.9 million of the 9% notes outstanding.

The company plans to fund the repurchases via a $350 million offering of senior notes due 2023 that was announced Monday.

In response to the news, MGIC’s 2% notes ticked up about 2 points to 123.125, according to a market source. The 9% notes, as well as the 5% convertible notes due 2017, were not seen in trading.

The 9% notes traded at 116.75 and the 5% notes at 102 last week.

The stock underlying the debentures, however, did trade up, rising 7 cents to $7.26.

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