Midday Commentary: New Cardtronics, Albany Molecular hover near par; Yahoo! offering in focus

By Rebecca Melvin

New York, Nov. 20 - Cardtronics Inc.'s newly priced 1% convertibles due 2020 were seen hovering near par in the early going Wednesday after the Houston-based ATM services provider priced $250 million of the notes at the midpoint of talked terms late Tuesday.

Albany Molecular Research Inc.'s newly priced 2.25% convertibles due 2018 were seen bid slightly below par with no offers after the Albany, N.Y.-based drug discovery services and manufacturing company priced an upsized $130 million of the notes at the midpoint of coupon talk and near the rich end of premium talk late Tuesday.

The Cardtronics 1% bonds were seen at 99.75 bid, 100.25 offered. The Albany Molecular notes were seen at 99.75 bid only, according to a New York-based trader.

Meanwhile, all eyes were on the proposed Yahoo! Inc. offering of $1 billion of five-year convertibles that was expected to price after the market close Wednesday.

One trader was using a credit spread of 125 basis points over Libor and a 32% vol. as inputs for his valuation of the Yahoo! deal. A second source said 125 bps was too wide. "Yahoo is better than the U.S. Treasury," the source said.

Yahoo!'s talked terms, at a 0% to 0.5% coupon and a 45% to 50% premium, were not viewed as favorable for investors, a New York-based trader said. But he liked the deal, saying it may "encourage more sizable issuers into the market."

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