New KEYW adds outright with stock sharply higher; MGIC up on hedge with shares down

By Rebecca Melvin

New York, July 16 – KEYW Holding Corp.’s newly priced 2.5% convertibles traded up to the 104 context early Wednesday, but trading action was scant after the Hanover, Md.-based cyber-security services company priced an upsized $130 million of the notes at the cheap end of talked terms.

The new KEYW convertibles were quoted “up about 4 points outright,” but the spread was fairly wide, a syndicate source said, He said poor borrow was to blame for light market action post pricing.

Back in established issues, Intel Corp.’s sister convertibles traded actively and up as many as 5 points outright, but flat on a hedged basis, after the Santa Clara, Calif.-based chip giant posted strong earnings and a rosy outlook that sent shares up 9%.

MGIC Investment Corp. was in trade again and lower outright, but slightly better on a hedged basis, after the Milwaukee-based mortgage insurer reported disappointing earnings that sent its shares lower by 7%.

Fellow mortgage insurer Radian Group Inc. saw its two convertible bonds trade mixed.

Both bonds have been in trade in the last few sessions after proposed liquidity rules for mortgage insurers were unveiled by the Federal Housing Finance Agency.

KEYW’s newly priced 2.5% convertibles were seen around 104 when the underlying shares were up about 7% at $12.95. But shares extended gains from there, ending at $13.29, which was up $1.18, or nearly 10%, on the day.

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