Tesla adds on upgrade; Chiquita edges up on takeover offer; Empire State down since issue

By Rebecca Melvin

New York, Aug. 11 – U.S. convertibles firmed up as calm returned to the financial markets on Monday, following last week’s pullback amid geopolitical tensions and uncertainty regarding where monetary policy is headed from here.

“Things are not sliding down. It’s not time to uncork the champagne, but with the market calmness, outrights have come back to repurchase some bonds, and things are firm,” a New York-based trader said.

Among issues that were firmer on Monday were Tesla Motors Inc.’s convertibles, which were trading up on the back of an upgrade on the Palo Alto, Calif.-based electric car maker, the trader said.

Deutsche Bank upgraded Tesla shares to “buy” from “hold” and lifted its price target to $310 per share from $220 per shares, citing strong growth prospects.

Company-specific news also drove some activity including Chiquita Brands International Inc.’s fresh takeover offer from Brazilian juice maker Cutrale Group and financial conglomerate Safra Group.

Chiquita’s out-of-the-money convertibles responded mildly to the news, stretching to 101 from around par while shares of the Charlotte, N.C.-based banana and produce distributor surged 30%.

Empire State Realty Trust Inc.’s $250 million of 2.625% exchangeable senior notes, which priced last week, were also trading Monday, as new parties stepped in amid a 1.25-point to 1.5-point price slide since issue.

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