Midday Commentary: Planned Nvidia 'looks OK'; planned Stanley Black & Decker also in focus

By Rebecca Melvin

New York, Nov. 25 - Two new deals launched in the convertibles market early Monday, with the large Nvidia Corp. deal for $1.3 billion looking just slightly cheap, according to one Connecticut-based trader, who was skeptical of how another technology name would perform in light of the recent trend in new issuance.

Last week, Yahoo! Inc.'s newly priced 0% convertibles slipped Thursday on their debut in the secondary market after the Sunnyvale, Calif.-based internet search, content and communications company priced an upsized $1.25 billion of the five-year notes at the rich end of talked terms.

The Connecticut trader said that using a credit spread of 150 basis points over Libor and a 25% volatility, the planned Nvidia deal looked worth about 100.5 at the midpoint of talk.

"It looks OK, but every big tech deal that has come recently is lower," the trader said.

Also launching early Monday was Stanley Black & Decker Inc. The New Britain, Conn.-based provider of hand tools, power tools and related accessories was planning to price $300 million of three-year mandatory equity units, or 3 million units at $100 each, after the market close.

The Nvidia deal was also expected to price after the market close.

Elsewhere, convertibles were fairly mixed despite strength in the broader markets.

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