Thermo-Electron Issues Convertible Bond

• Published in: Wall Street journal. Europe
• Main Author: This article was prepared by Allison Bisbey, Axel Bugge, Nicholas Elliott, Dan Weeks, George P. Bayliss, Chui-Ling Tam, Henry E. Teitelbaum and Eric Van Zant Of the Dow Jones Capital Markets Report
• Format: Newspaper Article
• Language: English
• Published: Brussels Dow Jones & Company Inc 08.04.1994
• Edition: Europe
• Subjects: Futures; Government bonds; Institutional investments; Prices; Treasuries
• ISSN: 0921-9986

Thermo-Electron's seven-year convertible issue was almost fully placed -- about half in Europe and the remainder in the U.S. through a 144A private placement. The notes closed trading at 100.50 bid, 101 offer, up from an issue price of par. Lehman Brothers International is lead manager for the transaction, with NatWest Securities Ltd. as co-lead. A #100 million ($146.9 million) issue by Northern Rock Building Society, based in Newcastle, England, was quickly placed with predominantly U.K. investors. Kleinwort Benson Ltd. and S.G. Warburg Securities Ltd. are joint lead-managers. The four-year notes pay interest at the three-month London interbank offered rate plus 12.5 basis points. At a reoffer price of 99.81, the yield to investors is Libor plus 18 basis points. But Tate & Lyle's #100 million issue of 8% bonds maturing October 1999 was slow to place, said market participants. While the jittery state of the U.K. gilt market is depressing demand for fixed-rate sterling bonds in general, some underwriters criticized the launch margin of 80 basis points over the 7% gilt due 1999. They said it was too meager for an unrated name, despite Tate & Lyle's strong presence in the U.K. Joint lead managers UBS Ltd. and Hoare Govett Securities Ltd. defended the pricing, noting demand from U.K. funds and insurance companies. The bonds were expected to be freed to trade Friday.