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Morning Commentary: Teva debt remains active; Whiting bonds rebound; Alpha issue set to mature
By Stephanie N. Rotondo
Phoenix, July 28 – Teva Pharmaceutical Industries Ltd.’s 0.25% convertible notes due 2026 continued to see active trading on Tuesday following Monday’s announcement that the Israeli company had made a $40.5 billion offer for Allergan plc’s generic drug unit.
“They are number one again,” a trader said.
The notes traded as high at 170 early in the session but came back in to trade with a 167 handle by mid-morning.
The stock (NYSE: TEVA), which had run up over 16% on Monday, was slipping a bit early Tuesday, falling 97 cents, or over 1%, to $71.03.
Meanwhile, Whiting Petroleum Corp.’s 1.25% convertible senior notes due 2020 were rallying, a trader said.
The trader saw the paper at 87 at mid-morning, up from Monday’s lows around 85.
The $1 billion issue priced in late March and traded well on its debut, pushing up past par. But as oil prices have declined, so have the notes.
The Denver-based company is slated to bring earnings after the market closes on Wednesday. Ahead of the results, the company’s equity (NYSE: WLL) was moving up 49 cents, or 2.3%, to $21.61.
Aside from Whiting, however, a trader said there was very little going on in oil and gas credits, especially those deemed distressed.
“There’s no bid for any of that stuff,” he said.
Looking ahead, the market is expecting that Alpha Natural Resources Inc. will not take out its 3.25% convertible notes due Aug. 1, given speculation the company is headed for bankruptcy.
“They are 34 points below face value with three days to go,” a trader said. “Do you think they get paid? I don’t.”
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