Halliburton gushes; Intel rises; AMD, Micron sink; Medtronic slide continues; new offerings power SanDisk

By Evan Weinberger

New York, Oct. 22 - Halliburton Co. was the big mover on the day Monday on a big third-quarter earnings report, while the rest of the convertibles market pretty much hung around where it started.

In the semiconductors space, Intel Corp. rose as reports came to light that the Federal Trade Commission was not investigating the industry giant. Advanced Micro Devices Inc. and other semiconductor firms, as well as members of Congress, have been calling for an antitrust investigation into Intel's business practices. Coincidentally, AMD and Micron Technology Inc. convertibles were down on the day. SanDisk Corp. convertibles were up slightly as well in relatively heavy volume on the announcement of two new products intended to battle Apple Inc.

Medtronic Inc. convertibles continued to slide Monday after last week's heart defibrillator recall-driven meltdown.

Among the more representative convertibles traded Monday were two usual suspects. Ford Motor Co. and Molson Coors Brewing Co. were both fairly active but ended the day right where they began. "I don't know if people are doing a whole heckuva lot of anything right now," one analyst said.

That was the theme of the day for the equity markets as well Monday. Investors came in expecting a dramatic drop following the over 2.5% losses in all three major American stock indices Friday. That didn't happen. "It's a strange day. It started out looking like the world was going to end," another analyst said. "Then [the Dow] rallied from the beginning, and got into the black. Now it's given back most of the gains."

The first analyst said that investors were looking for signs as to which way is up. At this point, he said, those signs aren't there. "I think people are waiting for something," he said. "I don't know what it is."

And so, despite the jagged lines tracing Monday's action on graphs around the brokerage houses, the markets ended the day slightly higher. To paraphrase what the second analyst said, there was a lot of ground covered to get not all that far.

The Dow finished the day up 44.95 points, or 0.33%, to close at 13,566.97.

The Nasdaq was the big mover on the day as tech names rallied. The index picked up 28.77 points, or 1.06%, Monday for a 2,753.93 close.

The Standard & Poor's 500 gained 5.70 points, or 0.38%, for a 1,506.33 close.

No new deals were announced in the United States Monday before press time, but one came in from Australia. Tamaya Resources Ltd. priced $30 million in 8.5% convertible bonds due Oct. 22, 2012.

The $30 million Regulation S transaction is the first stage of Tamaya's convertible bond program. No further details of future deals were given in Tamaya's announcement.

The conversion price was set at $0.351.

The convertibles are callable beginning Oct. 22, 2009 subject to a 160% hurdle. There is an investor put on Dec. 6, 2009. There are change-of-control protections and a negative pledge.

Tamaya is a Sydney-based gold and copper mining firm operating primarily in Chile. The company plans to use the proceeds to develop its operations at the Lichkvaz-Tey gold deposit near Meghri, Armenia.

Halliburton up on earnings, outlook

Houston-based oil services firm Halliburton announced third-quarter net income was up 19% Monday and said that the outlook for the immediate future was pretty bright. Specifically, Halliburton chairman and chief executive officer Dave Lesar told listeners to the earnings report conference call he expects increased growth in their Latin American, Asian and Middle Eastern operations. Those increases will offset any losses in U.S. operations, Lesar told investors.

Halliburton's 3.125% convertible senior notes due July 15, 2023 gushed on those words, closing Monday at 216 versus a closing stock price of $39.33. They finished Friday at 207.27 versus a stock price of $38.85.

Halliburton stock (NYSE: HAL) added 48 cents, or 1.24%, on Monday.

Intel rises; no investigation coming

On the day when Microsoft Corp. capitulated in its fight against European antitrust regulators, Intel was up as U.S. regulators continued to not investigate the Santa Clara, Calif.-based semiconductor giant on antitrust charges.

Specifically, rival AMD, other semiconductor producers and some members of Congress have asked the Federal Trade Commission to investigate Intel's deals with computer producers. AMD charged in a 2005 lawsuit that Intel threatened to cut off computer makers if they used AMD semiconductors.

A New York Times article Monday detailed the FTC's lack of an investigation.

After announcing strong earnings last week, Intel's stock and convertibles rose Monday. Intel's 2.95% junior subordinated convertible notes due Dec. 15, 2035 closed Monday at 105.63 versus a closing stock price of $26.64. They finished Friday at 104.5 versus a stock price of $26.30.

Intel stock (Nasdaq: INTC) added 34 cents, or 1.29%, on Monday.

At the same time, Sunnyvale, Calif.-based AMD saw its 6% convertible senior notes due May 1, 2015 close at 90.9168 versus a closing stock price of $13.75. They closed Friday at 91.9219 versus a stock price of $13.80.

After posting a weak earnings report last week, AMD stock (NYSE: AMD) continued to slide, losing 5 cents, or 0.36%, on Monday.

Boise, Idaho-based semiconductor producer Micron Technology saw its 1.875% convertible senior notes due June 1, 2014 close at 92.93 versus a closing stock price of $9.99. They finished at 93.59 versus a stock price of $10.08 on Friday.

Micron stock (NYSE: MU) slipped 9 cents, or 0.89%, on Monday.

SanDisk up with new product

On Monday, Milpitas, Calif.-based computer storage firm SanDisk announced the launch of Fanfare, a new video download service designed to compete with Apple Inc.'s iTunes service. Videos downloaded from Fanfare will play on the Sansa TakeTV PC-to-TV Video Player, a new pocket-sized device also announced Monday. Fanfare is slated to go live in early 2008.

Investors cheered the news. SanDisk's 1% convertible senior notes due May 15, 2013 closed Monday at 86.948 versus a closing stock price of $44.11. The convertibles finished Friday at 86.229 versus a stock price of $42.71.

SanDisk stock (Nasdaq: SNDK) stretched $1.40, or 3.28%, on Monday.

Medtronic slide continues

Minneapolis-based medical device producer Medtronic still hasn't found its footing since the announcement of a recall of one of its heart defibrillators last week. On Monday, Medtronic received the necessary approvals to sell a new heart stent in Europe.

Investors were not impressed. Medtronic's 1.5% convertible senior notes due April 15, 2011 closed at 114.94 versus a closing stock price of $47. They last traded on Thursday, when they closed at 115.966 versus a stock price of $47.48.

Medtronic's 1.625% convertible senior notes due April 15, 2013 closed Monday at 114.384 versus a stock price of $47. They finished trading Friday at 115.539 versus a stock price of $47.48.

Medtronic stock dipped a further 48 cents, or 1.01%, on Monday.

Sound, fury, little action for Ford, Molson-Coors

Shakespeare referred to life as "full of sound and fury, signifying nothing" in Macbeth. Not to be crass, but the same could be said for Ford and Molson Coors convertibles Monday.

Ford's 4.25% convertible senior notes due Dec. 15, 2036 and Molson Coors' 2.5% convertible senior notes due July 30, 2013 are consistently among the most actively traded convertibles on the market. They were again Monday, but they didn't get very far in their daily journey.

Dearborn, Mich.-based automaker Ford's convertible senior notes finished trading Monday at 114.25 versus a closing stock price of $8.34. They closed Friday at 114.25 versus a stock price of $8.37.

Ford stock (NYSE: F) didn't have a particularly eventful day either, slipping 3 cents, or 0.36%, on Monday.

Montreal-based brewer Molson Coors saw its convertible senior notes close Monday at 116.5 versus a closing stock price of $53.85. They closed Friday at 116.25 versus a stock price of $53.75.

Molson Coors stock (NYSE: TAP) closed Monday up a dime, or 0.19%.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.