Microchip higher as guidance raised; Acorda sees positive trial results; DISH gets a penalty

By Stephanie N. Rotondo

Seattle, June 6 – A round of fresh news was helping some convertible bonds move around on Tuesday.

For instance, Microchip Technology Inc.’s 1.625% convertible notes due 2027 were up about a point after the company upwardly revised its first-quarter guidance.

However, the company’s stock was only marginally higher on the day.

Acorda Therapeutics Inc.’s convertible bonds were also climbing higher during the session, as the company announced positive late-stage clinical trial results for its Parkinson’s disease drug. At one point, the underlying equity was up as much as 10%, though it eventually finished only a touch better.

On the downside, DISH Network Corp.’s 2.375% convertible notes due 2024 got hit a bit on news the satellite TV provider was slammed with a $280 million penalty related to a “robocall” case.

A trader said the convertibles “moved with the stock,” which also ended with a weaker tone.

Meanwhile, a trader said Newmont Mining Corp.’s 1.625% convertible senior notes coming due in July were busy ahead of the maturity.

“I guess the people who don’t want to hold until maturity are selling,” he said.

He saw the issue trading around 100.6, which was about unchanged.

As for the company’s stock, it rose $1.60, or 4.74%, to $35.29.

The convertible bonds mature on July 15.

Microchip revises guidance

Microchip Technology’s 1.625% convertibles did well on Tuesday after the company upwardly revised its first-quarter forecast.

A trader pegged the paper at 113, up from 112 previously.

Another market source saw the notes in a 112.5 to 113 context.

The company’s shares, however, were up less than 1%, adding 68 cents to close at $85.19.

For the first quarter, Microchip Technology is forecasting earnings per share of 62 cents to 64 cents, which compared to previous guidance of 59 cents to 64 cents.

Adjusted EPS is expected to be $1.22 a share to $1.26 a share. Initial guidance was $1.17 a share to $1.27 a share.

Additionally, consolidated net sales is projected to rise 4.5% to 6%, with a midpoint of 5.25%.

The company had previously forecast a gain of 2% to 7%, with a midpoint of 4.5%.

Microchip Technology is a Chandler, Ariz.-based manufacturer of microcontroller, memory and analog semiconductors.

Acorda rises on trial results

Positive late-stage results from a clinical trial of a Parkinson’s disease treatment helped Acorda Therapeutics’ 1.75% convertible notes due 2021 gain ground on Tuesday.

With the bonds at 80 against a stock price of $15.30, a trader deemed the debt “about 2 points better.”

The trader noted that the stock was “all over the place” during the session, trading as high as $17.10 before settling back at $15.35, the final price of the day.

Another market source said the bonds opened near 82.25 but closed in an 80 to 80.5 range.

Still, that was up at least a point, the source said.

Acorda said its latest clinical trial showed that its Parkinson’s drug, CVT-301, helped to ”significantly” improve motor function during “off periods,” which is when other Parkinson’s drugs don’t work as well and further impair such functions.

The drug is self-administered and inhaled. The recent trial included 339 patients and lasted 12 weeks. The most common side effects were cough, upper respiratory infections and nausea.

Two of the trial’s participants exited the study before the end due to the cough.

Acorda is a New York-based biotechnology company.

DISH declines

DISH Network’s 2.375% convertibles took a dip on Tuesday as the market reacted to word of a $280 million fine in regards to a “robocall” lawsuit.

One trader saw the paper trading “around 106,” which he said was off about 0.75 point. Another source placed the notes in a 105.5 to 106 context, which compared to 106 to 107 previously.

The equity fell $1.61, or 2.43%, to $64.58.

U.S. District Court judge Sue Myerscough slapped the Englewood, Colo.-based company with a $168 million federal penalty and also is requiring the company shell out $112 million to North Carolina, California, Ohio and Illinois based on what the judge termed “millions and millions” of solicitation calls.

The case was filed by the states and the Federal Trade Commission in 2009. It alleged that DISH and its contractors placed illegal calls using numbers on the Do Not Call registry.

While Myerscough did not believe the fine to be onerous, DISH said it would appeal the decision.

Mentioned in this article:

Acorda Therapeutics Inc. Nasdaq: ACOR

DISH Network Corp. Nasdaq: DISH

Microchip Technology Inc. Nasdaq: MCHP

Newmont Mining Corp. NYSE: NEM

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