Macquarie Infrastructure convertibles ‘get better and better’; Nuance bonds more active

By Stephanie N. Rotondo

Phoenix, July 24 – One name getting some play in the convertible bond market on Thursday was Macquarie Infrastructure Co. LLC, which continued to add to recent gains.

On July 10, the New York-based company sold $305 million of 2.875% convertible senior notes due 2019 at a 27.5% initial conversion premium.

“They came out two weeks ago and it’s done nothing but get better and better,” a trader said.

The trader pegged the notes early at 109.375 versus a stock price of $72.38 on a 23% delta.

Nearer to the close, the notes were seen at 109.875 versus a share price of $72.64.

The stock closed the day at $71.96, down 32 cents.

Barclays, J.P. Morgan Securities LLC, RBC Capital Markets LLC, SunTrust Robinson Humphrey Inc. and Wells Fargo Securities LLC ran the books on the deal.

Overall, market sources were lamenting a lack of activity in the convertibles space.

“It’s converts; it’s summer; nothing is going on,” one source said.

Nuance gets busy

A trader said Nuance Communications Inc.’s 2.75% convertible notes due 2021 were “more active than they have been,” but that they were about unchanged.

He saw the notes at 99.875 bid, 100.125 offered.

Another source placed the issue at 100.125 against a stock price of $17.89, deeming the bonds up nearly half a point.

Nuance’s equity ended the session at $18.01, up 32 cents, or 1.81%.

On Tuesday, the company announced the latest version of its talk-to-text program, Dragon Naturally Speaking 13. The software is said to be much more advanced than previous versions.

But the company’s plans for the mobile space might be what is driving investors’ interest. Apple’s Siri has been rumored to be based largely on Nuance’s own technology, and some have claimed that Apple has been hiring away Nuance employees to further develop Siri. It has also been rumored that Samsung is considering making a play for Nuance.

Central European in play

Central European Distribution Corp.’s 10% junior convertible notes due 2018 were seen trading in an 89.5 to 89.75 context on Thursday.

“They don’t trade all that often,” the trader said of the notes, adding that the issue is not convertible until the Polish alcohol distributor issues common stock again.

A second source saw the notes at 89.75, up a point from the last trades.

The notes were issued to holders of the company’s senior secured notes due 2016 in June 2013 as part of the company’s plan of reorganization. The stock was given in entirety to Roust Trading in exchange for funding cash payments made under the plan and for the cancellation of debt owed to Roust.

With the stock going to Roust, the equity was, for all intents and purposes, cancelled and therefore delisted.

Mentioned in this article:

Macquarie Infrastructure Co. LLC NYSE: MIC

Nuance Communications Inc. Nasdaq: NUAN

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