FXCM slips; SanDisk mixed in active trade; Xilinx contracts; Amyris prices, older Amyris at 80

By Rebecca Melvin

New York, Oct. 15 – U.S. convertibles were mixed in quiet trading on Thursday as equities climbed in the session’s second half to strong closing levels.

Distressed convertibles were subdued with few energy names changing hands as oil prices lagged for much of the session but ended up 0.2% at $46.75 per barrel for West Texas Intermediate crude.

Distressed names were “pretty quiet,” a Connecticut-based trader said. There was some action in FXCM Inc.’s 2.25% convertibles due 2018, and those bonds were a little lower at 67.5 with the underlying shares of the New York-based foreign exchange services company better by 2% at $10.23 at the close.

FXCM reported weaker key customer trading metrics for September for its retail and institutional foreign exchange business on Tuesday. Retail trading volume was down 1% from August and down 10% from September a year ago. Institutional trading volume was flat from August and down 44% from September 2014.

SanDisk Corp. remained mixed in active trade early Thursday amid speculation about a potential merger or acquisition for the Milpitas, Calif.-based flash memory chip maker.

The SanDisk 1.5% convertibles traded at 149.12, which was up another point or two on an outright basis, with those gains favorable against SanDisk shares, which were up $1.00, or 1.5%, at $69.70.

The SanDisk 0.5% convertibles were up maybe 0.5 point on an outright basis from Wednesday at 104.4. That bond, which doesn’t stand to perform as well in a takeover, is lagging.

Xilinx Inc.’s 2.625% convertibles due 2017 contracted about 0.5 point on a swap basis after the San Jose, Calif.-based programmable chipmaker reported better-than-expected earnings, a Connecticut-based trader said.

The Xilinx convertibles were at about 163, according to Trace data.

The convertible bond “is just running out of time and going closer to parity,” the trader said, explaining why the bond is lower and shares higher.

The company said it expects sales to grow between 3% and 7% sequentially in the third quarter, and Jefferies raised its stock price target for Xilinx to $48.00 per share from $42.00 and maintained a “hold” rating.

In the primary market, Amyris Inc. priced an upsized $57.6 million of 3.5-year, 9.5% convertible senior notes. The new notes were not heard in trade, but the older Amyris 6.5%, which matures one month after the new paper, traded at 80.

About $23 million face value of the older 6.5% bond will be repurchased with proceeds of the new bond.

Shares of Amyris were down 6 cents, or 3%, in early trade at $1. 90.

Back in secondary action, Prospect Capital Corp.’s 5.5% convertibles due August 2016 were trading actively with shares of the New York-based venture capital and private equity firm down 6 cents, or 0.8% at $7.41.

The Prospect 5.5% convertible printed at 101.25, according to Trace data.

Also Cepheid Inc.’s convertibles were still under pressure after the Sunnyvale, Calif.-based molecular diagnostic tests company warned that its third-quarter results will fall short of estimates. But shares were actually a little higher in the early going, after sinking 22% on Wednesday.

The Cepheid 1.25% convertibles traded down to about 87, which was a point or so lower on the day.

The SunEdison Corp. convertibles “barely traded” on Thursday with the underlying shares ending flat at $9.29 for the day.

Other than Thursday’s very small new deal from Amyris, the convertible primary market has been very quiet. The last new deal was a month ago when Extra Space Storage LP priced $500 million exchangeable senior notes. Before that a lot of the new paper was of the mandatory variety, a trader pointed out. “We really slowed down in the third quarter,” the trader said.

A second trader said that at this point the convertible market is pretty stale given the lack of new paper to stimulate portfolio adjustments.

Mentioned in this article:

Amyris Inc. Nasdaq: AMRS

Cepheid Inc. Nasdaq: CPHD

Extra Space Storage LP NYSE: EXR

FXCM Inc. Nasdaq: FXCM

Prospect Capital Corp. Nasdaq: PSEC

SanDisk Corp. Nasdaq: SNDK

SunEdison Corp. Nasdaq: SUNE

Xilinx Inc. Nasdaq: XLNX

© 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.