Morning Commentary: Convertibles quiet; Southwestern Energy launches $1.3 billion of mandatories

By Rebecca Melvin

New York, Jan. 12 – U.S. convertibles were trading quietly early Monday as the energy sector led equities lower amid further deterioration in oil prices, and Southwestern Energy Co. launched an offering of $1.3 billion of mandatory convertible preferred shares ahead of the market open for pricing Wednesday.

“So far so good, though we are not super busy,” a New York-based sellsider said regarding convertibles trading.

The sellsider said that not many energy-related names were in trade despite the ongoing slide in oil prices. West Texas Intermediate crude for February delivery slid another $2.05, or 4%, to $46.31 early Monday.

Even as oil prices fell, Southwestern Energy, a Houston-based oil and gas exploration and development company, wasn’t getting much of a reaction in the market yet as pricing on Wednesday afforded a little more time to look at valuations.

One name mentioned in trade was Qihoo 360 Technology Co. Ltd. Those bonds were trading OK, a sellsider said, as shares of the Chinese internet company slipped in the early going. The short-dated Qihoo 2.5% convertibles were trading at 96, and the Qihoo 0.5% convertibles due 2020, or the A tranche, were trading at 88 to 89.

Qihoo shares were off 67 cents, or 1%, at $57.12.

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