Morning Commentary: Teva convertibles rise on Allergan bid; trader expects IGI to remain firm

By Stephanie N. Rotondo

Phoenix, July 27 – Teva Pharmaceutical Industries Ltd.’s 0.25% convertible notes due 2026 were dominating early Monday trading, according to a trader.

Total trading volume in the convertibles space was about $82 million, the trader said. Of that, Teva’s bonds made up about $25 million.

The debt was trading higher after it was announced that the company was making a $40.5 billion play for Allergan plc’s generics unit, allowing it to drop its bid for Mylan NV.

The trader said the convertible notes were trading at 160 early in the day, then popped to 163.

The company’s equity (NYSE: TEVA) was up $7.77, or 12.55%, at $69.62 at mid-morning.

Meanwhile, IGI Laboratories Inc.’s stock remained on an upward track Monday after the generic drug maker reported strong second-quarter results on Friday.

But while the stock was better, a trader said he had yet to see any trading in the 3.75% convertible notes due 2019, though he opined they were likely in a 97 to 97.5 context.

That would compare to levels around 96 on Friday.

The stock (NYSE: IG) was up 38 cents, or 4.71%, at $8.45 at mid-morning.

Away from pharmaceuticals, a trader said many convertible market players were attempting to figure out “where this [oil and gas] stuff really is.”

“Nobody really knows,” he said.

© 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.