Finisar higher on debut with shares; Avis steady, Advanced Micro trades mixed; Trico jumps

By Rebecca Melvin

New York, Oct. 9 - Finisar Corp.'s new 5% convertibles - of which $90 million were priced late Thursday - were seen opening at 102 bid Friday upon release for secondary trading, and they moved up to 104 bid and above as its underlying shares pulled higher.

Avis Budget Group Inc.'s 3.5% convertibles traded at 101.5 versus a $12 stock price, which compared to 101.5 versus $11.76 on Thursday. There was also a late market in the Avis convertibles at 101.875 bid, 102.375 offered versus $12.20.

Title insurance company Stewart Information Services Corp. priced $60 million of 6% convertibles that were also released for secondary trading Friday, but those notes weren't heard in trade.

Advanced Micro Devices Inc. traded mixed, with the AMD 6% paper a little weaker, amid no particular news. The bonds fluctuated throughout the week after improving Monday, helped by a credit upgrade.

Trico Marine Services Inc. saw its bonds gain 4 or 5 points as its shares rose 6% on news of a proposed $400 million straight bond offering from the subsea services provider.

Trading in the convertibles market was pretty brisk early on, but quieted down quickly, sources said, particularly as bond market personnel thinned out ahead of the long holiday weekend.

Bond markets - but not stock markets - are closed Monday in observance of Columbus Day.

Pricing was pretty much unchanged, with a few names slightly stronger, sources said.

"I think it kind of stalled out here in this range," a Connecticut-based sellsider said of Advanced Micro Devices on Friday. "You could say that for the whole market. It's at a spot here where everything has kind of held steady."

The sellsider also noted that market players are waiting to see if there is more new issuance, and hopes are being held out for larger, or jumbo, issues, as opposed to the variety of smaller deals that the market is currently seeing.

Many of the recent offerings have been relatively limited in size and illiquid, sources said.

Finisar higher with shares

Finisar's newly priced 5% convertibles due 2029 were seen at 104 bid and trades that occurred were probably higher at the 105 or 106 level.

Shares of the Sunnyvale, Calif.-based maker of fiber optic subsystems gained $1.00, or 12%, to $9.54.

"I haven't seen it," one sellsider said of Finisar. "I traded the old ones right before the news came out and that blew my market apart."

Finisar priced an upsized $90 million of 20-year convertible senior notes at par after the close of markets Thursday to yield 5% with an initial conversion premium of 25%, according to a news release.

The Rule 144A offering, which was originally going to be $75 million in size, priced at the midpoint of talk, which was 4.75% to 5.25% for the coupon with a 22.5% to 27.5% initial conversion premium.

The bonds will be non-callable for five years and then provisionally callable for life at an equity price trigger of 130%.

Holders will have the right to redeem the notes in years five, seven, 10 and 15.

There is takeover protection via a standard matrix and full dividend protection.

Proceeds will be used to repurchase debt, including outstanding convertible notes, and for general corporate purposes, including working capital. Finisar may also use a portion of the proceeds to fund, acquire or invest in complementary businesses, products or technologies.

AMD fluctuates, trades mixed on Friday

AMD's 5.75% convertibles due 2012 traded a little better on Friday at about 84.5, which was up 0.5 point, according to a sellsider, and compared to 83.4 on Monday.

But AMD's 6% paper due 2015 was off by about the same amount.

Shares of the Sunnyvale, Calif.-based chip maker gained 37 cents, or 7%, to $5.88 on Friday amid no particular news.

"I don't know why it's up," a sellsider said of the stock .As for the bonds, which continue to trade consistently, they were mixed to little changed, having reached a level where they look fully valued.

The market began to roll over starting about Sept. 22 or Sept. 25. It was the same for all asset classes - converts, high yield and high grade, a sellsider said recently. So the AMD bonds have hit a pause.

Trico Marine jumps on proposed straight notes

Trico Marine's 3.25% convertibles due 2025 were seen at 64 Friday, up from about 58 previously.

Trico Marine's 8.125% convertibles due 2013 were seen last at 95.5, up from 92 bid, 93 offered previously.

Shares of The Woodlands, Tex.-based subsea services provider gained 49 cents, or 6.3%, at $8.25.

Trico Marine was up on news that it is planning a $400 million straight bond offering, a sellsider said.

Trico Marine Services announced that its wholly owned subsidiary Trico Shipping AS intends to offer $400 million of five-year senior secured notes in a Regulation S deal.

The company intends to use proceeds to repay about $367 million of debt of Trico Supply and its subsidiaries, as measure by the amount outstanding at May 14.

The bonds will be guaranteed by the company's wholly owned subsidiary, Trico Supply AS and by Trico Supply's subsidiaries, other than Trico Shipping, and parent companies.

Recently Barclays Capital convertibles analysts recommended the Trico 8.125% converts as a long swap (i.e. out of the equity, into the convert) driven by the security's structural characteristics; and the Trico 3s were recommended to position for a realignment of the capital structure given that these converts are trading close to Barclays' estimate of their floor value.

Stewart Information quiet on debut

Stewart Information's 6% convertibles due 2014 weren't heard in trade and its underlying shares closed unchanged on the day at $10.30.

The title insurance company, based in Houston, priced $60 million of five-year convertible senior notes at par after the close of markets at the cheap end of talk for the coupon and at the talked 25% initial conversion premium.

The Rule 144A offering was sold via FBR Capital Markets.

Mentioned in this article:

Advanced Micro Devices Inc. NYSE: AMD

AirTran Holdings Inc. NYSE: AAI

Avis Budget Group Inc. NYSE: CAR

Finisar Corp. Nasdaq: FNSRD

Steward Information Services Corp. NYSE: STC

Trico Marine Services Inc. Nasdaq: TRMA

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