Morning Commentary: Bid for Iconix 2.5% convertible resumes; Cobalt bonds quiet after busy Monday

By Rebecca Melvin

New York, Jan. 12 – A bid resumed in Iconix Brand Group Inc.’s 2.5% convertible bonds early Tuesday, with little change in pricing from recent levels, a New York-based trader said.

The Iconix 2.5% convertibles, which mature in June, traded at about 82.5. This is the issue that has been in the cross hairs of late as traders eye prospects for the company in the short term. Iconix is a New York-based brand management company that licenses and markets 35 consumer brands, including Rampage, Mudd, Candie’s and Joe Boxer.

“There was no bid late yesterday in ICON, but now the 2.5% has one,” the trader said.

There was no market to speak of in the Iconix 1.5% convertibles due 2018, but that level should be about 43 bid, 44 offered, the trader said.

Iconix shares were at $5.30, which was up 26 cents, or 5%, in the early going.

The stock and bonds of Iconix collapsed in early November after the company announced restatements of certain financials between 2013 and 2015 and lowered its forward guidance. The 2.5% convertibles dropped below the current range to 78 to 81 at that point, which was down from 97.

Elsewhere, Cobalt International Energy Inc.’s convertible bonds were quiet as shares of the Houston-based oil-focused exploration and production company moved lower again.

The Cobalt 3.125% convertibles due 2024 were unchanged at 43.125, and the Cobalt 2.625% convertibles due 2019 were at 52, also unchanged. Cobalt shares were down 2% at $3.86.

Oil prices were initially stable at the market open, but West Texas Intermediate crude oil for February delivery was last down another $0.57, or 1.8%, to $30.84 per barrel.

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