Ford, AMD down; Molson Coors moves up; Peabody spins wheels; market meltdown slows movement

By Evan Weinberger

New York, Sept. 7 - Some of the usual suspects - Molson Coors Brewing Co., Advanced Micro Devices Inc. and Ford Motor Co. - saw their convertibles trade Friday.

Boston Properties LP, Yahoo! Inc. and Peabody Energy Corp. also changed hands on the day, but as the stock markets skidded, the convertibles market all but halted.

Over the last hour or two of the trading day, one analyst said he saw little or nothing cross his screen. "I think people got tired of looking at everything, put in a couple of trades early and then sat back and watched," the analyst said.

What they watched was not pleasant.

Unexpected results from a jobs report released Friday morning erased some of the mixed signals from Thursday, and the stock markets tumbled. According to a Labor Department report, overall U.S. payrolls shed 4,000 jobs in August, the first time in four years that the economy hadn't added jobs. To top that bad news, the job loss came as a total surprise to most observers. Economists had expected anywhere between 90,000 and 110,000 jobs to be created during the month.

Market observers did say that the new jobs report would almost guarantee an interest rate cut from the Federal Reserve during the Sept. 10 week. And on the bright side, the unemployment rate stayed at 4.6%, unchanged from July.

Stocks opened lower and just kept going. The Dow Jones Industrial Average flirted with losing 300 points but in the end melted down by 249.97 points, or 1.87%, to close at 13,113.38.

The Nasdaq and the Standard & Poor's 500 didn't fare much better. The Nasdaq stumbled to a close of 2,565.70, a drop of 48.62 points, or 1.86%. The S&P 500 was smacked with an even 25-point, or 1.69%, plunge for a close of 1,453.55.

"I think it's the kind of day that could keep people from making any moves," another analyst added early in the afternoon.

A day with a massive stock sell-off is probably not what a company announcing a new offering wants to see, but that's just what Baseline Oil & Gas Corp. got.

Baseline marches into the breach

Market watchers have consistently said that companies needing an infusion of cash will continue to enter the convertibles marketplace. That's just what Houston-based oil and gas drilling and exploration operation Baseline is doing as credit spreads widen and fears of a recession mount.

To finance its acquisition of oil and natural gas assets from DSX Energy Ltd., LLP and related parties, Baseline is offering a total of $160 million in bonds, the company announced Friday. Of that total, $50 million will be offered in senior unsubordinated convertible notes due Oct. 1, 2013.

The remaining $110 million will be offered in senior secured notes due 2012.

There was no official word yet on when it would price or in what ranges, but Baseline took its show on the road Friday and will stay out there until Sept. 19.

Limited activity on a down day

Friday is normally not the most active trading day, and a stock market freefall doesn't help. So many issues that trade fairly actively only saw one or two over the course of Friday, if they traded at all.

Among the issues that did trade Friday were Molson Coors' 2.5% convertible senior notes due July 30, 2013. The convertibles closed Friday at 105.63 versus a closing stock price of $89.24. The Montreal-based beverage producer, best known for its beers, closed at 104.75 versus a closing stock price of $88.68 on Thursday.

Molson Coors stock (NYSE: TAP) was one of the bright spots Friday, gaining 56 cents, or 0.63%, on Friday. Perhaps watching the market slide made investors and traders need a cold one.

Ford's 4.25% convertible senior notes due Dec. 15, 2036 had a tough day. The convertibles closed at 105.5 versus a closing stock price of $7.52. They finished Thursday at 107.75 versus a stock price of $7.78.

In a market environment where people may fear making big purchases, Dearborn, Mich.-based auto giant Ford saw its stock (NYSE: F) lose 26 cents, or 3.34%.

Sunnyvale, Calif.-based semiconductor producer Advanced Micro Devices saw its 6% convertible senior notes due May 1, 2015 close Friday at 85.38 versus a closing stock price of $12.61. They finished trading Thursday at 86.25 versus a stock price of $12.94.

AMD stock (NYSE: AMD) oozed 33 cents, or 2.55%, on Friday.

Boston-based office real estate investment trust Boston Properties convertibles and stock both slumped Friday, although one more than the other. The REIT's 3.75% exchangeable senior notes due May 15, 2036 closed at 109.25 versus a closing stock price of $96.76. The convertibles finished Thursday at 109.75 versus a stock price of $99.13.

Boston Properties stock (NYSE: BXP) dumped $2.37, or 2.39%, on Friday.

Peabody Energy, a St. Louis-based coal miner, saw its convertibles change hands but essentially remain the same. Peabody's 4.75% convertible junior subordinated debentures due Dec. 15, 2066 closed Friday at 102.13 versus a closing stock price of $45.11. They finished Thursday at 102.125 versus a stock price of $45.41.

Peabody stock (NYSE: BTU) gave back 30 cents, or 0.66%, on Friday.

Sunnyvale, Calif.-based internet services provider Yahoo! saw its zero-coupon convertible senior notes due April 1, 2008 close at 120 versus a closing stock price of $23.76. They finished trading Thursday at 121.625 versus a stock price of $24.15.

Yahoo! stock (Nasdaq: YHOO) punted away 39 cents, or 1.61%, on Friday.

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