Nasdaq OMX Group announces cash tender offer, convertibles gain; Newmont paper improves

By Stephanie N. Rotondo

Portland, Ore., Sept. 20 - The convertibles market strengthened Tuesday, which one trader said was "not a surprise" given the rise - albeit modest - in the straight equity markets.

"Things seem to be a little better in the convertible world," the trader said. He noted that flow was still light and that most of the actively traded issues were "big investment-grade names."

"Liquidity has picked up a little bit, but not a lot," said another trader. "Overall the market is still not particularly attractive. But it's better than it was."

Notable for the day was news that the Nasdaq OMX Group Inc. had launched a cash tender offer for its 2.5% convertible senior notes due 2013. The offer was at a premium, which one sellsider said came as no shock.

The convertibles traded up to the offer price, traders reported.

Elsewhere, Newmont Mining Corp.'s convertibles were among the busiest issues, following in line with a gain in the equity. According to one source, the gains were due to an increase in the price of gold.

Nasdaq rises on tender

New York-based Nasdaq OMX Group said Tuesday that it was tendering for $428 million of its 2.5% convertible notes as part of a debt refinancing that also included the refinancing of a credit facility.

Nasdaq is offering $1,025 in cash for each $1,000 of notes tendered. One trader said that the premium was not a surprise.

"They have to in order to induce people to give bonds back to the company," the trader said.

On the news, another trader said the notes moved up "roughly 2 points" outright to 102.25 from 100.5.

Nasdaq's stock fell 9 cents to $24.70 on Tuesday.

The second trader also noted that Stillwater Mining Co.'s 1.875% convertible notes due 2028 had risen to 97 bid, 97.25 offered.

"I would surmise it's better because of the Nasdaq [offer], which is a similar kind of play" in terms of duration, the trader said.

Newmont active as gold jumps

A trader said Newmont Mining's convertibles were "very active" as the stock gained $3.63, or 5.48%, to close at $69.90.

"Gold is up," he said by way of explaining the action. "It's a gold play."

He said the 3% convertibles due 2012 were at a premium at $70.83.

For its part, the price of gold increased by $26.60, or 1.5%, to $1,801.50.

The gold mining company is based in Greenwood Village, Colo.

Mentioned in this article:

Nasdaq OMX Group Inc. NYSE: NDAQ

Newmont Mining Corp. NYSE: NEM

Stillwater Mining Co. NYSE: SWC

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.