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Convertible Arbitrage Related News
 in chronological order

 See also: Convertible Arbitrage Related Books, Convertible Arbitrage Related Scholarly Papers, or Convertible Arbitrage Home Page.

Table of Contents:
 

Convertible arbitrage funds suffer sixth month of losses
May 9, 2006
From FinancialNews-US.com:
 Convertible arbitrage hedge funds have suffered six months of losses in a row, their worst run since 2005 when many of them went out of business.

The funds, which take partially-offsetting positions in a company’s convertible bonds and its equity, have on average recorded losses of 10% since the start of November, according to indices published by US data provider Hedge Fund Research.

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International Power convertible bond issue raised to 700 mln euros
May 9, 2006
From Forbes:
 International Power Plc. said the total principal amount of its senior convertible bond issue has been raised to 700 million euros after a 50 million over-allotment option has been exercised.

The option was granted to Deutsche Bank AG's London branch and Morgan Stanley & Co International Plc.

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Moore Capital Closes Canadian Unit Following Losses (Update1)
December 13, 2006
From Financial Times:
 New issues of convertible bonds have surged to record levels this year, with volumes accelerating sharply since the start of the credit crisis as investors seek the safety of an instrument that is used more widely in volatile markets.

Convertible bonds are protected on the down side because they guarantee a fixed rate of interest, while at the same time can be swapped into the issuing company’s shares.

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Convertible bond issues at record levels
December 4, 2006
From Financial Times:
 New issues of convertible bonds have surged to record levels this year, with volumes accelerating sharply since the start of the credit crisis as investors seek the safety of an instrument that is used more widely in volatile markets.

Convertible bonds are protected on the down side because they guarantee a fixed rate of interest, while at the same time can be swapped into the issuing company’s shares.

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New world to raise HK$6 bln from convertible bond sale
May 15, 2006
From China Knowledge:
 New World Development, a diversified conglomerate with investments in property, telecommunications and retailing, plans to raise HK$6 billion from the sale of convertible bonds.

The company and bookrunners began marketing the seven-year bonds issue Monday night at an indicative conversion price range of HK$26.784 to HK$28.768, market sources told the South China Morning Post. That represents a 35 per cent to 45 per cent premium on yesterday's closing price of HK$19.84.

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Convertible bond funds ride stocks' run
May 15, 2006
From MarketWatch:
 Investors have embraced one-stop target date- and balanced mutual-funds, but they may be passing up potentially higher returns from convertible debt securities.

"It's an area of the market that's generally overlooked," said Larry Keele, manager of Vanguard Convertible Securities Fund.

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Lehman eyes India, China for growth in convertible bonds
April 27, 2006
From Business Standard:
 Lehman Brothers Holdings Inc, the fourth-largest arranger for equity-linked sales in Asia, expects India and China to be the fastest-growing markets for convertible bond sales in the region.

“India is a new market for us, where fees for arranging convertible bond sales are still kept at a reasonable level,’’ said Joonkee Hong, the firm’s Hong Kong-based head of global finance for the Asia-Pacific region.

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Making MedImmune Convertible Holders Whole
April 27, 2006
From SchaeffersResearch.com:
 AstraZeneca (AZN: View sentiment for AZNsentiment, chart, options) announced this morning that is going to pay $58 for MedImmune (MEDI: View sentiment for MEDIsentiment, chart, options) , giving a tremendous score to those who jumped on the bandwagon after MedImmune put itself in play recently. I wrote a piece a few days ago about how convertible holders receive far better treatment now in these situations than they did a few years ago. This is a good opportunity to take you through a few of the numbers.

MedImmune issued two different convertible bonds last summer. The first carried a 1.375-percent coupon and was designed to mature in July 2011, while the second paid 1.625 percent for July 2013. The stock was trading at $27.24 when both bonds were issued (at 100, of course).

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Aldar's $1.3bn convertible Islamic bond, museum deals
January 31, 2006
From AME Info:
 Known as a Sukuk Al Mudarabah, the $1.3 billion bond has Barclays Capital, Credit Suisse and the National Bank of Abu Dhabi acting as joint global coordinators for the issue.

Aldar Properties announced in October that it planned to raise around $4 billion in conventional and Islamic debt to fund projects. This is the normal pattern for private sector property developer with the correct level of gearing being applied to the equity base to maximize shareholder profits.

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U.S. Bancorp to sell $3 bln convertible debentures
January 31, 2006
From Reuters:
 U.S. Bancorp (USB.N: Quote, Profile , Research) said its $3 billion convertible debentures will bear quarterly interest of 1.75 percent below the LIBOR rate.

The company would use the proceeds to fund repurchases of up to 14 million shares, it said in a statement.

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UPDATE 1-S.Korea's KEPCO in $1 bln convertible sale-sources
November 21, 2006
From Reuters:
 South Korea's Korea Electric Power Corp. (KEPCO) (015760.KS: Quote, Profile, Research) launched up to $1 billion in five-year convertible bonds in euro and yen tranches, according to sources familiar with the deal and a term sheet seen by Reuters on Tuesday.

KEPCO (KEP.N: Quote, Profile, Research), which has a virtual monopoly in electricity provision in South Korea, will offer $824 million in convertible bonds with a 25 percent increase option that could boost the total to up to $1 billion.

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HK's Hang Fung Gold to issue 240 mln hkd convertible bonds due 2011
November 20, 2006
From Forbes:
 Hang Fung Gold Technology Ltd said it plans to issue 240 mln hkd convertible bonds due 2011 to Goldman Sachs.

The estimated net proceeds of 230.40 mln hkd will be used for repayment of bank borrowings and to fund the company's general working capital, Hang Fung said in a statement.

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AIGB promotes convertible bonds
November 6, 2006
From The Star Online:
 AMINVESTMENT Group Bhd (AIGB) is encouraging its eligible customers to use structured products, including US dollar convertible bonds.

US dollar-denominated euroconvertible bonds had caused a lot of problems to corporates that had issued such bonds before the regional financial crisis in 1997.

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Giga-Byte issues Taiwan convertible with zero yield
November 3, 2006
From FinanceAsia.com:
 Taiwan-based motherboard manufacturer Giga-Byte Technology has raised $100 million from an aggressively priced convertible bond with no yield.

Consequently, the CB was sold purely on its equity story, which is expected to improve after the company announced a joint venture with Asustek Computer in August. According to a source, the offer was well covered with around 40 investors in the book when it closed after only two hours. About 80% were specialty CB investors who were likely pleased about the opportunity to buy something out of Taiwan.

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Phillips Carbon issues equity, convertible warrants

October 25, 2006
From Moneycontrol.com:
 Equity shares and convertible warrants of Phillips Carbon Black Ltd (PCBL) are being issued on a preferential basis to the associates of promoters and ICICI Bank. The RPG group company is raising approximately Rs 50 crore for funding its 30-MW power plant at Durgapur in West Bengal.

Convertible Warrants

Among the promoters' associates are Adorn Investment Ltd, Universal Industrial Fund Ltd and Off-Shore India Ltd. The company is issuing 30 lakh convertible warrants on a preferential basis. At present, these outfits already have stakes in the company. While Adorn Investments holds 7.17% (12.72 lakh shares), Universal Industrial Fund holds 0.52% (91,650 shares) and Off-Shore India holds only 250 shares.

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United Therapeutics to offer $210 million convertible notes

October 23, 2006
From Reuters:
 United Therapeutics Corp. (UTHR.O: Quote, Profile, Research) on Monday said it would privately offer $210 million of convertible senior notes due 2011 to institutional buyers.

In a statement, the biotechnology company said it would use about $100 million to $125 million of net proceeds from the offering to buy back about 1.8 million to 2.2 million common shares.

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Deutsche Bank, GLG face fines over convertible bonds

October 17, 2006
From MarketWatch:
 French stock market regulator Autorite des Marches Financieres is seeking heavy fines on Deutsche Bank AG (DB) and U.K.-based hedge fund GLG Partners over their involvement in a 2002 issue of convertible bonds by Alcatel SA (ALA), the Financial Times reported on its Web site Tuesday.

The AMF recommends that Deutsche Bank pay a EUR1.5 million fine - the AMF's maximum penalty - while GLG should pay EUR1 million, according to people familiar with the contents of a report issued by the AMF, FT reported.

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Profiting from Convertible Arbitrage

October 17, 2006
From Schaeffers Research:
 Another significant event today in the land of biotechnology convertibles involved Intermune (ITMN: View sentiment for ITMNsentiment, chart, options). The company signed a collaboration agreement with pharmaceutical giant Roche, giving Roche exclusive licensing rights to ITMN's developmental Hepatitis C treatment in exchange for a series of payments and funding of development costs. Analysts seem to think ITMN was able to negotiate highly attractive terms.

ITMN has issued two convertible bonds. The first one carried a 5.75-percent coupon and was ultimately refinanced with the currently outstanding 0.25-percent bond. (Don't you wish your mortgage banker could get you a deal like that?) Of course, there was a catch. The 0.25-percent bond had a much lower conversion price, giving its holders more equity upside. In other words, the company effectively refinanced its old bonds by issuing stock, although it issued stock indirectly, by means of the low-coupon convertible. The new convertible was still a bond, though, and would only actually become equity if the stock performed well over time.

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Fu Ji Food issues tasty second convertible

October 11, 2006
From FinanceAsia.com:
 Fu Ji Food & Catering became the fifth Asian company to issue convertible bonds in two weeks when it raised HK$1 billion ($128 million) from an upsized offering late Monday.

While the investor response to the various issues has been somewhat mixed, the increased frequency of the deals suggest that issuers are becoming happy with share price levels again. Market participants are now watching for the next Indian CB following a five-month long drought in the wake of the global equity market correction in May, during which only one convertible above $100 million has hit the market.

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Finisar Enters Into Agreements to Exchange $100 Million of Its Outstanding 2 1/2% Convertible Notes

October 9, 2006
From Market Wire:
 Finisar Corporation (NASDAQ: FNSR), a technology leader in gigabit fiber optic solutions for high-speed data networks, announced today that it has entered into separate privately negotiated agreements with certain holders of its outstanding 2 1/2% Convertible Subordinated Notes due 2010 (the "Outstanding Notes") under which such holders have agreed to exchange $100 million aggregate principal amount of Outstanding Notes for an equivalent principal amount of a new series of 2 1/2% Convertible Senior Subordinated Notes due 2010 (the "New Notes"). Overall, the exchange provides the Company with more flexibility to utilize its cash flow from operations between now and 2010, while also minimizing dilution to shareholders. The exchange transactions are expected to close on October 12, 2006.

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Golden Eagle issues convertible six months after its IPO

September 29, 2006
From FinanceAsia.com:
 Golden Eagle Retail Group has raised another HK$1 billion ($129 million) for acquisitions and working capital by selling five-year convertible bonds with a three-year put only six months after completing its $206 million Hong Kong IPO.

The sale was arranged by ABN AMRO Rothschild and came only a week after the IPO lock-up ended, suggesting the China-based department store operator may have some funding needs in the near future. ABN was also one of the two bookrunners for the IPO together with Goldbond Securities.

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Khazanah Sells $750 Mln of Islamic Convertible Debt (Update3)

September 28, 2006
From Bloomberg:
 Malaysia's state investment arm raised $750 million in Southeast Asia's biggest sale of Islamic convertible bonds, seeking to cut its stake in a telephone company and support the nation's bid to become a financing hub.

Khazanah Nasional Bhd. expanded the sale of five-year debt from an initial $500 million plan to meet demand, the company said in an e-mailed statement today. Holders of the bonds will be able to exchange them into shares of Telekom Malaysia Bhd., which is 40 percent owned by Khazanah.

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Market rallies, first joint-stock lender convertible bonds issue

September 20, 2006
From Thanhnien News:
 The VN-Index Tuesday soared five points to close at 515.08 with 29 listed stocks up, three other down and the other 18 unchanged.

The market saw the trade value rocket in comparison to Monday’s session. The stock trade was 2.7 million shares valued at a total VND171.5 billion (US$11 million), up nearly 40 percent from the previous day.

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Sydney Gas shakes with Babcock & Brown over convertible note deal

September 20, 2006
From Egoli.com:
 Sydney Gas Limited (SGL) today advised that consistent with the existing convertible note facility agreement with Babcock & Brown Securities Pty Limited, notice had been issued to Babcock & Brown requiring them to subscribe for 155,944 convertible notes in Sydney Gas at an issue price of $100 each on 22 September 2006 for a subscription amount of $15,594,400.

Babcock & Brown has confirmed that it would subscribe for the convertible notes on that date.

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Bristow to offer $200 million of convertible preferred stock

September 11, 2006
From Reuters
 Bristow Group Inc. (BRS.N: Quote, Profile, Research) on Monday said it will sell $200 million of mandatory convertible preferred stock in a public offering to purchase aircraft.

The net proceeds from the deal would be used to fund $98.8 million purchase price for the acquisition of five large aircraft among other things, the company added. 

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Triumph Group to offer $175 mln of convertible notes

September 11, 2006
From Reuters
 Triumph Group Inc. (TGI.N: Quote, Profile, Research) on Monday said it will offer $175 million in aggregate principal amount of convertible senior subordinated notes due 2026.

The company intends to use the net proceeds for the prepayment of its outstanding Class A and Class B senior notes due 2012, it said in a statement. 

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U.S. convertible bond market recovers, issuance up

August 31, 2006
From Reuters
 Issuance in the U.S. convertible bond market this year is expected to dwarf last year's supply as rising volatility and wider corporate bond spreads makes the securities an increasingly attractive form of financing for companies.

As much as $60 billion of new issuance is expected this year after a meager $37 billion last year, analysts said. 

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Hynix May Revive $400 Million Convertible Bond Sale (Update3)

August 22, 2006
From Bloomberg
 Hynix Semiconductor Inc., Asia's second-largest maker of computer memory chips, may revive plans to sell about $400 million of bonds convertible to company stock by the end of the year to fund an increase in production capacity.

``We're considering the possibility of such an issuance, but nothing's been decided yet,'' James Kim, head of investor relations at Ichon, South Korea-based Hynix, said in a telephone interview today. 

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BRE Properties sets $350 mln convertible note sale

August 8, 2006
From Reuters
 Real estate investment trust BRE Properties Inc. (BRE.N: Quote, Profile, Research) on Tuesday said it commenced a $350 million sale of 20-year convertible senior notes.

An additional $52.5 million of notes may be issued to cover over-allotments within 30 days of the initial notes' issuance, the company said in a statement.

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