Morning Commentary: NXP Semiconductors’ $1 billion offering in focus; secondary mostly quiet

By Rebecca Melvin

New York, Nov. 24 – NXP Semiconductors NV was in focus early Monday as market players weighed valuations of the Dutch company’s $1 billion offering of five-year convertible senior notes, which was expected to price under Rule 144A and Regulation S after the market close.

The NXP deal was looking slightly rich, according to several sources. Using a credit spread of 275 basis points over Libor and a 30% volatility, the deal looked worth about 99.3 at the midpoint of talk, a Connecticut-based trader said.

A second source concurred with that credit spread but said he thinks there is more vol. to NXP.

NXP Semiconductors shares were up about 1% at late morning.

Elsewhere, there were some technology issues, including those of LinkedIn Corp. and Twitter Inc., changing hands, “but nothing meaningful,” a New York-based trader said.

BioMarin Pharmaceutical Inc. was garnering a look after the Novato, Calif.-based biopharmaceutical company said it has agreed to buy Dutch pharmaceutical company Prosensa Holding NV for up to $840 million.

The BioMarin convertibles were not really trading, but there were “a couple of inline prints,” a trader said.

BioMarin’s 1.5% convertibles due 2020 were seen trading at 119 to 120.4, which was up a point or so outright, according to Trace data.

BioMarin’s 0.75% convertibles due 2018 were seen trading at 117, which was up from 115 on Friday, Trace said.

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