New Actavis adds on debut; American Tower adds in the gray; Huron, Chesapeake improve

By Rebecca Melvin

New York, Feb. 25 – Actavis plc’s upsized $4.6 billion of 5.5% mandatory convertible preferred stock traded well on Wednesday upon release for secondary market dealings, moving up to 102 in the early going with the underlying shares up 1%, according to market sources.

The Actavis mandatories remained at 102 when shares came off for just a 0.5% gain on the day.

Elsewhere, there was ongoing softness in convertible paper as market players sold issues to make room for the new Actavis deal and a second large mandatory convertible preferred from American Tower Corp. that was seen pricing after the market close.

The American Tower deal was seen trading up in the gray market ahead of final terms being set, at 101 to 101.25, a New York-based trader said.

“I heard it’s going to price at the rich end again,” the trader said, referring to the fact that Actavis came at the rich end of talk, which was tightened during marketing.

Meanwhile, Huron Consulting Group Inc.’s 1.25% convertibles were lower outright but expanded about 1 point to 1.25 points after the Chicago-based consulting company reported quarterly results that missed expectations on revenue. The company also guided revenue below consensus going forward.

The convertibles of Chesapeake Energy Corp. traded actively and held in after the Oklahoma City-based energy exploration and production company missed fourth-quarter earnings estimates and its shares sank 10%.

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