New Lexicon trades down; Qihoo unchanged after China rate cut; LGI Homes up on week

By Rebecca Melvin

New York, Nov. 21 – Lexicon Pharmaceuticals Inc.’s new 5.25% convertibles traded down Friday after The Woodlands, Texas-based biopharmaceutical company priced an upsized $80 million of the seven-year senior notes at the cheap end of talk.

“Lexicon traded terribly; they dropped down to 97 immediately,” a New York-based trader said.

He attributed the poor debut to the small deal size and illiquidity and general illiquidity in the convertibles market currently.

Lexicon’s shares were down sharply as well, ending 5.5% lower at $0.95 after $50 million shares of common stock priced concurrently with the $80 million bond deal at $1.005 each.

LGI Homes Inc.’s 4.25% convertibles, which priced earlier this week, were seen at 101.25 bid, 101.75 offered at the close, which represented a dollar-neutral gain since issue of a little more than 2 points, a syndicate source said.

Elsewhere, Qihoo 360 Technology Co. Ltd. was active but unchanged in terms of pricing. The Chinese convertible name was pulled into trade after China unexpectedly cut interest rates and boosted China shares and the broader markets. The move sparked limited activity in the convertibles of some Chinese companies. Those issues generally lagged their underlying stocks.

Other China convertible names that were seen changing hands included E-House (China) Holdings Ltd., SouFun Holdings Ltd. and YY Inc. But they weren’t trading that actively, a New York-based trader said.

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