Fiat Chrysler weakens after early strength; IGI trades around issue; energy space slides

By Rebecca Melvin

New York, Dec. 11 – Fiat Chrysler Automobiles NV’s new mandatory convertibles closed at par 11/16 to 15/16 compared to the $100 issue price, according to a syndicate source.

On a delta-neutral basis, the new mandatories were down a point, based on a stock price of $11.00, which is where a concurrent stock offering priced. But the new issue had done better earlier in the day, and many hedged players did better, sources said.

“Some of them actually made 2 points, depending on where they got their short off,” a syndicate source said of hedged players.

The new IGI Laboratories Inc.’s 3.75% convertibles closed “wrapped around par,” a syndicate source said. Shares of the Buena, N.J.-based generic pharmaceutical company fell 23 cents, or 2.6%, to $8.66 compared to where the new convertibles priced.

Fiat priced $2.5 billion of the two-year securities at the cheap end of talked terms, and IGI priced $125 million of the five-year notes at the cheap end of coupon talk and midpoint of premium talk. Both new issues traded actively, sources said.

Elsewhere, energy names – and the overall convertibles market – were still in the doldrums, with crude oil prices dropping again. West Texas Intermediate crude for January delivery closed down $1.31, or 2.2%, to $59.63.

Energy XXI Ltd.’s 3% convertibles due 2018 traded down to 34.75, which was sharply lower from 42 on Wednesday and 49 earlier this week, according to Trace data.

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