Morning Commentary: New deals from Veeco Instruments, NICE Systems trade above par

By Stephanie N. Rotondo

Seattle, Jan. 12 – New issues continued to be all the rage in the convertible bond market on Thursday, as fresh deals from Veeco Instruments Inc. and NICE Systems Inc. were circulating.

“There is nothing going on outside of those two issues,” a trader said, noting that overall volume was higher than usual but only because of Veeco and NICE.

Late Wednesday, Veeco priced $300 million of 2.7% convertible senior notes due 2023 at par with an initial conversion premium of 35%.

The deal came upsized from $200 million. Price talk was 2.625% to 3.125%, with a conversion premium of 37.5% to 42.5%.

Come early Thursday, the notes were trading in a 101.5 to 102 context, according to a trader.

The underlying equity (Nasdaq: VECO), however, was down 80 cents, or 2.88%, at $27.00.

As for the NICE deal, it came early Thursday. The company sold an upsized $250 million of 1.25% exchangeable senior notes due 2024, with an exchange premium of 22.5%.

The yield came richer than the 1.5% to 2% talk, while the exchange premium was on the rich end of the 17.5% to 22.5% talk. The deal was upsized from $225 million.

A trader pegged the paper at 104 bid, 104.5 offered.

“I guess they liked the pricing,” he said.

The equity (Nasdaq: NICE) was also faring better, moving up more than 2% in early dealings.

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