Cobalt, Energy XXI rebound; Xilinx adds on hedge after earnings; Monster up after pricing

By Rebecca Melvin

New York, Oct. 17 – U.S. convertibles were up strongly on Friday with many names that were hard hit in the recent rout recouping half to more than half of their losses. Traders were palpably tired by Friday afternoon after the market’s whipsaw action this past week.

“Energy names came back a lot,” a New York-based trader said. Other names also pounded this past week, including SunEdison Inc. and Tesla Motors Inc., came roaring back as well, adding 0.5 point to 2 points on delta and reversing a good portion of the week’s drop, which equaled 0.5 point to multiple points down on Monday alone.

But by Friday afternoon, Cobalt International Energy Inc. had recouped 5 points to 6 points of a contraction that totaled about 10 points on swap since late September, a New York-based trader said.

Fellow battered energy name, Energy XXI (Bermuda) Ltd. had also recouped significantly over Thursday and Friday, the trader said.

Elsewhere, Xilinx Inc.’s convertibles traded actively and gained on a dollar-neutral basis on the heels of positive quarterly earnings.

In this week’s primary market, the only new deal ended up doing well. Monster Worldwide Inc.’s newly priced 3.5% convertibles whipped around upon release for secondary market dealings on Friday. The issue traded anywhere from 97 to 104 after the New York-based employment-services website priced $125 million of the five-year senior notes at the cheap end and beyond the cheap end of talk.

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