Midday Commentary: Sequenom jumps outright on patent news; ADM net share settlement, maturity eyed

By Rebecca Melvin

New York, Jan. 9 - Sequenom Inc.'s 5% five-year convertibles jumped on an outright basis early Thursday as those bonds were pulled into active trade on positive news that the San Diego-based provider of genetic analysis products has been granted patent protection in Europe for its analytical methods for detecting fetal aneuploidy.

The Sequenom convertibles changed hands at 92.5 against shares that were up 9% at $2.68 early Thursday. That compares to 88.75 bid, 89.25 offered versus Wednesday's share close at $2.46, a trader said.

Also in early action Archer-Daniels-Midland Co.'s 0.875% convertibles due Feb. 15, 2014 continued to be a focus of trade. The ADM bonds were a little lower in line with the underlying shares early Thursday, or around 102.125 to 102.875, which was down from 103ish Wednesday. The shares were down about 1%.

The ADM bond has a net share settlement feature, which is typical of new issuance in the past two or three years, and which is indicated to trigger prior to maturity, according to the indenture. That has implications for the value of the convertible as it shortens the optionality of the bond, a New York-based sellsider pointed out.

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