Morning Commentary: Illumina trades mixed after earnings; Red Hat strengthens; Ford calls bonds

By Rebecca Melvin

New York, Oct. 21 – Trading action in U.S. convertibles picked up early Tuesday with mixed performance on a hedged basis as the S&P 500 stock index extended gains for a fourth straight day.

“It’s definitely busier than yesterday,” a New York-based sellsider said.

Illumina Inc.’s convertibles were active and traded mixed after the San Diego-based developer of genetic research tools reported quarterly earnings that beat estimates.

Illumina’s longer-dated, 0.5% convertibles due 2021, or B series, were active and traded up to about 111, which was seen better by about a point on a dollar-neutral, or hedged, basis, a New York-based trader said.

The Illumina 0% convertibles due 2019, or the As, were up less than a point at about 106, while the older Illumina 0.25% convertibles were down a little bit, the trader said.

Red Hat Inc.’s 0.25% convertibles due 2019 traded up more than 1.5 points to 106.723, according to Trace data, while the underlying shares edging up just 1% to 1.5%.

Ford Motor Co.’s 4.25% convertibles due 2016 traded up 1.6 points to 163.53, according to Trace data. The Dearborn, Mich.-based automaker called those bonds on Tuesday.

A New York-based sellsider said the Ford bonds hadn’t yet traded at her firm but that the call news was being evaluated.

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