Allscripts up on debut; new Take-Two trades under par; Halcon quiet after quick marketing

By Rebecca Melvin

New York, June 13 - Allscripts Healthcare Solutions Inc.'s newly priced 1.25% convertibles traded up about a point on their debut in the secondary market Thursday after the $300 million of seven-year paper priced at the midpoint of talk late Wednesday, market sources said.

"It traded pretty much long-only, and up about a point," a syndicate source said of the new Allscripts, referring to trading among outright investors.

Take-Two Interactive Software Inc.'s newly priced 1% convertibles were actively traded under par at the 98.5 reoffered price and a little higher with shares after the $250 million of five-year convertible senior notes priced at the cheap end of talk late Wednesday.

Halcon Resources Corp. priced before the market open Thursday as essentially an overnight deal and was indicated slightly higher. It was intended to have one-day marketing, but instead successful accelerated book-building made it possible to price early at the cheap end of talk.

Given that the issuer didn't have to account for a move in shares between launch and pricing, it was as if the preferred deal came at the midpoint of talk, a syndicate source said of Halcon.

Also being eyed was NorthStar Realty Finance Corp.'s planned deal, which launched late Wednesday for pricing after the market close Thursday. The $300 million of 20-year exchangeables were talked to yield 4.875% to 5.375% with an initial conversion premium of 10% to 15%.

The NorthStar deal "was really not all that exciting," a New York-based trader said.

Back among established issues, TTM Technologies Inc. was under pressure but stabilizing, with its 3.25% convertibles due 2015 seen a little over par at about 100.25 on Thursday.

The Costa Mesa, Calif.-based circuit board product company supplies Apple Inc., and its shares essentially track Apple's, a New York-based trader said.

"Some guys are looking to lighten up on it. It's one of those interest-rate-sensitive names that are not overly exciting," the trader said.

Overall the market was seen as having stabilized from weakness in the past two weeks.

A sell-off of yield names, where some people took a hit, has pretty much dissipated, a trader said Thursday.

As for the broader markets, stocks rallied as investors eyed less potential for tapering on the heels of weakness in global markets and amid positive economic data including retail sales in the United States.

Stocks rallied. The Dow Jones industrial average shot up 180.85 points, or 1.2%, to 15,176.08; the S&P 500 stock index gained 23.84 points, or 1.5%, to 1,636.36, and the Nasdaq stock market gained 44.94 points, or 1.3%, to 3,445.37.

New Allscripts adds a point

Allscripts newly priced 1.25% convertibles due 2020 traded up to 100.75 bid, 101.25 offered for much of the day.

With the deal pricing off of a $13.22 share price, it was seen up a point on an outright basis.

"No one is trading this on swap; it's more outright," a New York-based analyst said.

"At the mids, it was about 101," he said.

Shares of the Chicago-based medical software services company were weak early but regained their footing to end the day flat or up 3 cents to $13.25.

The $300 million offering priced at the midpoint of talk, where the seven-year paper was seen rich according to valuations calculated before pricing.

The Rule 144A deal priced with a 30% premium.

The deal was sold via joint bookrunners Citigroup Global Markets Inc. and J.P. Morgan Securities LLC. Co-managers were Deutsche Bank Securities Inc., SunTrust Robinson Humphrey Inc. and KeyBanc Capital Markets LLC.

The notes are non-callable for life with no puts. There is takeover protection and dividend protection via a standard conversion ratio.

Proceeds will be used to repay debt and also to pay the cost of a call spread, or convertible note hedge and warrant transactions with initial purchasers of the notes or their affiliates.

New Take-Two trades under par

Take-Two's new 1% convertibles were indicated 98.75 bid, 99.25 offered versus an underlying share price of $15.44 during the issue's debut session.

A New York-based trader said the paper traded around 99.25. That was up from 98.5, which was the level at which they priced at a discount to par. And they were actively traded.

"That was pretty much the entire market," the trader said of activity in the new Take-two.

Ahead of pricing, Allscripts' deal had been seen a little rich at the midpoint of talk, and the Take-Two deal had been seen fair value at the midpoint, according to sources.

"I think there was some push back on the terms: 1% up 40% looked a little steep to some people," a New York-based market source said.

Pricing came at the cheap end of talk, which was for a 0.5% to 1% coupon and a 40% to 45% premium.

The registered, off-the-shelf deal has an over-allotment option for up to $37.5 million additional notes.

Joint bookrunning managers were JPMorgan, Barclays and Wells Fargo Securities LLC.

The notes may be settled in cash, shares or a combination of cash and shares. They are non-callable and there are no puts except a change-of-control put.

A portion of the proceeds will be used to redeem all of the company's outstanding 4.375% convertibles due 2014, with remaining proceeds earmarked for general corporate purposes, which may include acquisitions and other strategic investment, refinancing of debt and stock repurchases.

There are two older Take-Two issues. One is being redeemed and the other is remaining outstanding.

New York-based Take-Two is an interactive entertainment software company.

Halcon sees quick turnaround

Halcon's newly priced 5.75% convertible preferreds were quoted in the market at 1,015 bid, 1,025 offered, according to a syndicate source. But they really didn't trade.

The $1,000 par perpetual preferred saw quick overnight marketing even though a full day of marketing was initially envisioned.

The $300 million deal for the Houston-based oil play was well received by outright investors.

The deal priced at the cheap end of talk, which was for a 4.25% to 5.75% yield and 20% to 25% premium.

The registered, off-the-shelf deal has a $45 million greenshoe and was being sold via joint bookrunning managers JPMorgan and Barclays.

The notes are non-callable for five years and then provisionally callable if shares exceed 150% of the conversion price. There are no puts. They have takeover and dividend protection.

The company plans to use proceeds to repay a portion of its outstanding borrowings under its senior secured revolving credit facility.

Mentioned in this article:

Allscripts Healthcare Solutions Inc. Nasdaq: MDRX

Halcon Resources Corp. NYSE: HK

NorthStar Realty Finance Corp. NYSE: NRF

Take-Two Interactive Software Inc. Nasdaq: TTWO

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