Last week's $4 billion convertible offering from Medtronic, which followed a similarly structured $5 billion offering from Amgen in February, confirmed what a number of investors and capital markets execs were hoping would happen: a return of the mega convert. senior notes with five and seven year tenors. The coupons were 1 1/2% and 1 5/8% with a 10% premium on the convert, boosted

Medtronic priced two tranches of $2 million each of convertible to 50% with a call spread overlay. Like Amgen's deal, proceeds are being used to fund a robust share buyback program.

Pricing on the coupon came in the wide half of the proposed range. Bankers said Treasury spreads widened on the day of pricing and defended the final result by saying 1.5% on the five year notes is still a good price.

While recent deals from smaller growth issuers have been dominated by long-only investors, both Amgen and Medtronic placed more than 80% of their offerings with convertible arbitrage funds. "You need those guys to get the deal done and they like this kind of large deal," said one capital markets executive.

Merrill Lynch, Morgan Stanley, Citigroup, Banc of America Securities and Deutsche Bank were joint bookrunners on Medtronic. The first three also had lead roles in the Amgen offering.