Market remains subdued amid holidays, spring break; Suntech Power convertibles volatile

By Stephanie N. Rotondo

Phoenix, March 26 - Holidays and spring break continued to take precedence Tuesday, resulting in yet another muted day of trading in the convertible bond market.

A trader said that Suntech Holdings Co. Ltd.'s 3% convertible notes that were to have matured on March 15 remained the most active issue in the world of convertibles.

"There's really good volume in it," he said.

A few hours before the market closed, the trader saw the issue trading in a 28 to 28½ context, about in line with where it had gone out on Monday. But by the end of the day, the issue had risen to 29 bid, 29¼ offered.

"It's all guess work," the trader said of the price volatility, given that it is unclear how things will shake out now that the company is in bankruptcy.

The stock has also been volatile and busy. At Tuesday's close, the equity had dropped a penny, or 2.22%, to 44 cents.

The Chinese solar company filed for bankruptcy on Wednesday. Eight of the company's Chinese lenders were behind the filing, as they had sought court approval the previous Monday to deem the main operating subsidiary insolvent.

Suntech had also failed to pay off the convertible notes on March 15. The missed payment was deemed a default and therefore triggered defaults on other outstanding debt.

Mentioned in this article:

Suntech Power Holdings Co. Ltd. NYSE: STP

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