Morning Commentary: Medicines adds on hedge; Resource Capital slips from discounted offer price

By Rebecca Melvin

New York, Jan. 8 – Medicines Co.’s newly priced 2.5% convertibles traded up early Thursday after the Parsippany, N.J.-based health care company priced an upsized $350 million of the seven-year senior notes at the rich end and midpoint of talked terms.

Trading in the new Medicines convertibles was very active, and they were seen changing hands at 101.75, according to Trace data, with the company’s shares higher, and also at 101.25 with the stock trending back to the flat line.

The bonds were seen to have expanded on a hedged basis by about a point, a New York-based trader said.

Trading was brisk in Medicines and in the convertibles market overall, and one trader, when asked if the new Medicines convertibles were better on a dollar-neutral basis, said he hadn’t had time to look yet.

Later in the morning, Medicines shares turned negative and were last down 10 cents at $24.69.

Resource Capital Corp.’s newly priced 8% convertibles traded down to 98.25, according to Trace data, after being offered at a discount to par of 99. The deal was for $100 million of five-year notes that priced beyond the cheap end of initial 7% to 7.5% coupon talk.

Resource Capital shares were mostly positive and were last seen up 3 cents at $4.88.

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