Web.com prices deal; YRC falls as Credit Suisse hired; Dendreon declines; MolyCorp drops

By Stephanie N. Rotondo

Phoenix, Aug. 9 - The primary convertible bond market saw yet another new issue priced Friday.

Web.com Group Inc. brought $225 million of 1% senior convertible notes due 2018. The company initially announced the deal late Thursday.

The notes were sold at the discounted price of 98.5. The initial conversion rate is 28.5714 common shares per each $1,000 of notes, equaling a conversion price of $35.00 per share. That represents a 24.3% premium.

Around midafternoon, a trader said most prints in the new deal were around 99.

The stock ended the day at $26.89, down $1.27, or 4.51%.

In the secondary market, fresh earnings were causing names like YRC Worldwide Inc., Dendreon Corp. and MolyCorp Inc. to move around.

YRC hires Credit Suisse

YRC Worldwide's 10% series A convertible notes due 2015 were softer Friday, trading at 95 outright, according to a trader.

"The stock is off again," he added.

At midafternoon, the equity was trading at $18.42, down from previous levels in the $20-range. At the close, the stock was down $4.48, or 19.85%, at $18.08.

YRC released its second-quarter results late Wednesday and held a conference call Thursday. In the call, the company noted that it had $219 million of liquidity between available cash and credit line borrowings.

The Overland Park, Kan.-based trucking company also noted that it had hired Credit Suisse as an adviser in order to figure out how to deal with upcoming convertible maturities in 2014 and 2015.

YRC has $65.5 million of 6% unsecured convertible notes maturing in February. Another $146.1 million of the 10% series A convertibles, as well as $62.1 million of 10% series B convertible notes, come due in March 2015.

Dendreon's Provenge misses

Dendreon's 2.875% convertible notes due 2016 were weakening after the pharmaceutical company said that sale of its drug Provenge would not met previous forecasts this year.

A trader said the debt initially opened Friday's session at 68.75 bid, 69 offered but soon drifted down to around 67.

The stock fell $1.20, or 26.14%, to $3.39.

The trader noted that Wedbush had also cut its price target on the company's stock to zero.

Seattle-based Dendreon had revenues of $73.3 million, which was below analysts' estimates of $74.8 million. Nearly all of the revenues came from sales of Provenge.

"We'll not be able to meet our goal of growing Provenge year over year," chief executive officer John Johnson said in a conference call held Thursday. "We have seen that when Provenge is recommended to patients by physicians, some patients may hesitate because they do not understand immunotherapy."

Provenge is a drug that trains a body's immune system to treat cancer cells as a virus.

MolyCorp stressed

A trader said MolyCorp was "a name with too much stress."

The mining company posted a loss of $71.2 million, or 44 cents per share, late Thursday.

The loss was wider than the previous year - at $67.7 million - but the loss per share narrowed, due to an issuance of additional stock.

Revenues improved 31% to $136.9 million.

Analysts polled by Thomson Reuters were expecting a loss of 23 cents per share on revenues of $158 million.

The trader said that on Aug. 1, MolyCorp.'s 6% convertible notes due 2017 were trading around 84. On Friday, the issue was pegged at 77 bid, 77.25 offered.

The stock dropped 72 cents, or 9.72%, to $6.69.

Mentioned in this article:

Dendreon Corp. Nasdaq: DNDN

MolyCorp Inc. NYSE: MCP

Web.com Group Inc. Nasdaq: WWWW

YRC Worldwide Inc. Nasdaq: YRCW

© 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.