Morning Commentary: Amphastar convertible notes price, jump on secondary trading debut

By Abigail W. Adams

Portland, Me., Sept. 13 – The convertibles secondary space was active on Wednesday as the first new deal of the week made its aftermarket debut.

Amphastar Pharmaceuticals Inc. priced $300 million of long five-year convertible senior notes after the market close on Tuesday at par with a coupon of 2% and an initial conversion premium of 35%.

Pricing came at the cheap end of talk for a coupon of 1.5% to 2% and at the rich end of talk for an initial conversion premium of 30% to 35%.

The new paper hit the secondary space on a mixed day for equities as markets digested the latest Consumer Price Index report.

The Dow Jones industrial average was up 56 points, or 0.16%, the S&P 500 index was 0.24%, the Nasdaq Composite index was up 0.31% and the Russell 2000 index was down 0.28% shortly before 11 a.m. ET.

The CPI report came largely in line with expectations, except for the core price index report, which reflected an increase of 0.3% versus the 0.2% expected.

There was $141 million on the tape about one hour into the session with new paper from Amphastar accounting for more than half of the activity.

The new paper was putting in a strong performance.

The convertibles were changing hands in the 101.75 to 102 context with stock up about 1% early in the session.

The notes expanded about 1.25 points on a dollar-neutral, or hedged, basis, a source said.

There was $85 million in reported volume.

Amphastar’s stock was seen at $47.34, an increase of 1.8%, shortly before 11 a.m. ET.

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