Morning Commentary: Planned Nuance slightly cheap; existing Nuance in line; Allscripts up with stock

By Rebecca Melvin

New York, Dec. 1 – Nuance Communications Inc.’s planned $550 million of 20-year convertible bonds looked to be worth about 100.5 at the midpoint of price talk, using a credit spread of 200 basis points over Libor and 30% vol., a Connecticut-based trader said early Tuesday.

But there were plenty of valuations using a tighter 350 bps spread, the trader said. And a second source was using a credit spread of 300 bps over Libor.

The Nuance deal was talked at a 1% to 1.5% coupon and 27.5% to 32.5% initial conversion premium. The deal was expected to price after the market close on Tuesday.

Nuance’s older 2.75% convertibles were flat to higher in active dealings in the early going. They were last seen at 102.5, according to Trace data. Nuance shares were up about 0.9% at $21.11.

Elsewhere, Allscripts Healthcare Solutions Inc.’s 1.25% convertibles due 2020 rose 1.5 points outright to nearly 110, in tandem with a lift in the underlying shares of the Chicago-based medical IT software company after it announced a stock repurchase program of up to $150 million of stock by the end of 2018.

Allscripts shares were up 29 cents, or 1.9% to $15.52 last.

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