MGM jumps amid spinoff chatter; energy names hit again by lower oil; Molycorp slumps

By Rebecca Melvin

New York, March 17 – MGM Resorts International’s convertibles jumped in active trade Tuesday amid chatter over activist Land and Buildings’ push for the Las Vegas-based casino operator to convert to a real estate investment trust and spin off its real estate assets.

MGM’s 4.25% convertibles due April 15, 2015 jumped back up to 116, which was up more than 9 points, on Tuesday, according to Trace data. That level is up from about 107 on Monday – a level to which the bonds had slipped in recent sessions ahead of the issue’s upcoming maturity in less than a month.

Selling hit some energy names as oil prices extended losses into a sixth session.

Energy XXI (Bermuda) Ltd.’s 3% convertibles dropped to as low as 25 before recouping some of their fall to close around 28. The bonds also fell on Monday.

But shares of Energy XXI, a Houston-based energy exploration and production company, were higher again, adding 4.5% on Tuesday on top of a 2.6% rise on Monday.

Goodrich Petroleum Corp.’s 5% convertible due 2032 traded down 0.375 point to 52.375, according to Trace data.

The Emerald Oil Inc. 2% convertible was down a couple of points, a trader said, as the underlying shares of that Denver-based oil company fell nearly 9%.

Elsewhere, Molycorp Inc.’s 6% convertibles traded at 8.5 after the Greenwood Village, Colo.-based rare earths producer reported a wider-than-expected quarterly loss.

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