Molson Coors tap opens; Yahoo! up with rivals soaring; Intel, AMD avoid fall; two more REITs to enter market

By Evan Weinberger

New York, Oct. 9 - Investors bellied up to Molson Coors Brewing Co. Tuesday on news of its joint venture with SABMiller plc as financial markets got back to work Tuesday after the long weekend.

With Google Inc. trading up above $600 per share Tuesday, Yahoo! Inc. was able to move up. Yahoo also announced plans to buy a stake in China's largest online shopping web site.

Intel Corp. and Advanced Micro Devices Inc. managed to avoid the fall that other semiconductor producers took Tuesday.

Trading didn't get off to a fast start Tuesday, but picked up a bit as the equities markets surged toward the end of the session. "It was really ungodly quiet until the end of the day," one trader said.

The market was in a holding pattern throughout the early part of Tuesday. Looming earnings reports, with the first set expected after the close of the day's trading, contributed to that. The wait for notes from the Federal Reserve's Open Markets Committee' Sept. 18 meeting also contributed. Market players sat on their hands, waiting to glean whether any future rate cuts were on the way. "That's as good an explanation as any," an analyst said when asked about the early sluggishness.

At around 2 p.m. ET, the Fed released those minutes. They seemed to leave a further rate cut later in October as a distinct possibility, depending on market conditions. And stocks were off to the races.

The Dow Jones Industrial Average reached another record, gaining 120.80 points, or 0.86%, closing at 14,164.53. The Standard & Poor's 500 joined in the record setting. The S&P finished up 12.57 points, or 0.81%, for a 1,565.15 close.

The Nasdaq also ran up, gaining 16.54 points, or 0.59%, to close at 2,803.91.

Two REITs coming to market

Two real estate investment trusts announced the launches of new deals Tuesday after the market close.

iStar Financial Inc. launched $500 million in senior unsecured floating-rate notes due Oct. 1, 2012. The notes are talked at a coupon of three-month Libor plus 25 to 75 basis points and an initial conversion premium of 28% to 32%. There is a $75 million greenshoe on the registered transaction.

The floaters have call protection throughout and are set to price Wednesday after the market close.

iStar is a New York-based commercial REIT that specializes in financing commercial real estate. The REIT plans to use the proceeds to repay outstanding debt stemming from the credit facility it established for iStar's acquisition of Fremont General Corp.'s commercial real estate lending business. That deal was announced in May. Any remaining proceeds will be used to repay other existing debt.

iStar stock (NYSE: SFI) closed Tuesday at $35.93, a gain of 55 cents, or 1.55%.

Rayonier Inc., a REIT, timberland management and cellulose fiber producer based in Jacksonville, Fla., announced the launch of $250 million in senior unsecured exchangeable bonds due 2012. The exchangeables are talked at a coupon of 3.75% to 4.25% and an initial conversion premium of 18% to 22%. The Rule 144A transaction has a contingent conversion subject to a 130% hurdle.

The exchangeables will carry full dividend and takeover protection. There are no calls or puts.

There is a $37.5 million greenshoe.

The exchangeables are set to price Wednesday after the market close.

Rayonier stock (NYSE: RYN) closed Tuesday at $46.99, a gain of 61 cents, or 1.32%.

Molson Coors bubbles over

News that Montreal-based Molson Coors Brewing and London-based SABMiller will enter into a joint venture to better compete against Anheuser-Busch Cos. Inc. caused cheers among investors.

The new entity, MillerCoors, will control about 29% of U.S. beer sales. Of course, Anheuser-Busch controls around 50% of the market.

SABMiller, which produces Miller Lite, Miller High Life and Miller Genuine Draft, will control 58% of the new entity, while Molson Coors, producers of Coors and Coors Lite, will control 42%. The deal is expected to face close antitrust scrutiny but is also expected to be allowed to go through.

Molson Coors' 2.5% convertible senior notes due July 30, 2013 overflowed Tuesday, closing at 118.38 versus a closing stock price of $56.15. They finished trading Monday at 112.125 versus a stock price of $50.83.

The keg was also flowing freely on Molson Coors stock (NYSE: TAP), which gained $5.32, or 10.47%, on the day.

Yahoo! follows on Google's comet tail

Sunnyvale, Calif.-based Yahoo! announced Tuesday morning that it was buying a 10% stake in Alibaba.com, China's largest e-commerce web site. But that's not what really drove the stock and convertible.

Google, the big dog in web searching, saw its stock trade over $600 again Tuesday, and that picked up the rest of the sector. Google (Nasdaq: GOOG) closed Tuesday at $615.18, a gain of $5.57, or 0.91%. Amazon.com was also up.

Trying to catch the Google comet, investors sent Yahoo!'s zero-coupon convertible senior notes due April 1, 2008 to a close of 139.5 versus a closing stock price of $28.37. The convertibles closed Monday at 138 versus a stock price of $28.05.

Yahoo! stock (Nasdaq: YHOO) gained 32 cents, or 1.14%, on Tuesday.

Intel, AMD avoid semiconductor losses

For the most part, the semiconductor sector had a down day on Wall Street Tuesday. But the two biggest firms, Santa Clara, Calif.-based Intel and Sunnyvale, Calif.-based AMD, managed to avoid any losses. In fact, stock in both firms finished up, as did their convertibles.

Intel's 2.95% junior subordinated convertible notes due Dec. 15, 2035 closed Tuesday at 103.63 versus a closing stock price of $25.84. They finished trading Monday at 102.875 versus a stock price of $25.66.

Intel stock (Nasdaq: INTC) gained 18 cents, or 0.70%, on Tuesday.

AMD's 6% convertible senior notes due May 1, 2015 closed Tuesday at 91.25 versus a closing stock price of $13.79. They finished trading Monday at 90.625 versus a stock price of $13.63.

AMD stock (NYSE: AMD) closed Tuesday up 16 cents, or 1.17%.

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