Convertible primary, secondary trading quiet; Energy XXI trades lower; American Realty up

By Stephanie N. Rotondo

Phoenix, March 11 – It was slow going in the convertible bond market on Wednesday, according to traders.

“It’s really quiet,” one trader said. He noted that it has been subdued in the space for some time, as there were fewer ideas to go around.

As such, that has created a high demand for new issues.

“Everything that comes just gets sucked up,” he said.

However, supply has been quite limited.

“There’s no pipeline anymore; there’s just an announcement,” he said. Most deals that have come have been of the mandatory convertible variety, he remarked, which means they tend to be registered. “Everything is overnight on registered paper.”

In secondary dealings, the trader said that most of the action – what little there is – has been in commodities and energy, given the volatility currently circling that arena.

For instance, Energy XXI Ltd.’s 3% convertible notes due 2018 fell 1.5 points to 36, even as the company’s stock rose 4.9 cents, or 1.49%, to $3.3999.

That issue in particular has been under pressure since the company sold $1.45 billion of junk-rated straight bonds last week.

American Realty gains

American Realty Capital Properties Inc.’s 3% convertible notes due 2018 were gaining ground Wednesday as investors reacted to news out late Tuesday regarding the appointment of a new chief executive officer.

The notes gained over a point to close at 97, according to a market source. The stock underlying the debt was meantime up 31 cents, or 3.32%, at $9.64.

The real estate investment trust – which has offices in Phoenix and New York – said Tuesday that Glenn J. Rufrano will take over the position of CEO on April 1 from interim CEO William Stanley.

Stanley took the post in mid-December when Nick Schorsch stepped down from the role, following an accounting probe that resulted in the departure of several executives and the company having to restate earnings.

Mentioned in this article:

Energy XXI Ltd. Nasdaq: EXXI

American Realty Capital Properties Inc. Nasdaq: ARCP

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