Midday Commentary: EnPro Industries in focus after court ruling; Tower Group convertibles lower

By Rebecca Melvin

New York, Jan. 13 - U.S. convertibles were steady in subdued early trading Monday, trading sources said. No new U.S. deals were launched or priced.

EnPro Industries Inc. was in focus after the Charlotte, N.C.-based maker of sealing products, bearings and other engineered products won a bankruptcy court ruling that it won't have to set aside more money to cover mesothelioma claims against one of its subsidiaries.

The EnPro 3.938% convertibles due 2015 were seen at 231.323 versus an underlying share price of $73.64, a New York-based trader said. EnPro shares were up 24% in early trading. It wasn't immediately clear if the bonds contracted or expanded on a hedged basis.

Also trading was Tower Group International Ltd.'s convertibles, and they were lower. There didn't appear to be any new news for the Bermuda-based reinsurance company following last week's announcement that it agreed to be bought by ACP Re Ltd., a privately owned reinsurance company, for $172 million.

Tower's 5% convertibles were seen at 93.5 bid, 99.5 offered, which was down about 2 points, a Connecticut-based trader said.

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