Allegheny Technologies drops below par on debut; new Repligen edges up; FXCM tumbles

By Rebecca Melvin

New York, May 19 – Two new issues debuted in the convertibles secondary market on Thursday and accounted for the lion’s share of the day’s trading volume, although pricing performance was weak despite the fact that deal flow has been little more than a trickle all year.

Because new deal volume has been so low, many traders thought Allegheny Technologies Inc.’s $250 million of 4.75% convertibles would trade better. But the new deal traded down below par right out of the gate, along with weaker shares. On a dollar-neutral, or hedged, basis, they improved only about 0.25 point to 0.5 point, a trader said.

“I thought the pricing was compelling,” a New York-based trader said of Allegheny, referring to the paper’s big, chunky coupon and the fact that it priced at the cheap end of talked terms. “So it surprised me that they didn’t do better.”

Repligen Corp.’s new 2.125% convertible did a bit better, but it also came at the cheap end of talked terms and didn’t perform as well as may have been expected. As it was, the bonds moved up to about 101.5 with lower shares. The Waltham, Mass.-based bioprocessing company priced $100 million of the five-year senior notes.

Back in established issues, FXCM Inc.’s 2.25% convertibles due 2018 turned heads when it suddenly dropped about 8 points after not having traded for a while.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.