Morning Commentary: SunEdison convertibles mostly flat on disappointing quarterly loss

By Rebecca Melvin

New York, Aug. 6 – Quarterly earnings reports continued to drive activity in U.S. convertibles on Thursday.

SunEdison Inc.’s complex of convertible bonds slid on an outright basis in tandem with a large drop in the underlying common shares after the company reported a disappointing quarterly loss. But the SunEdison tranches were mostly unchanged or even better on swap, a New York-based trader said.

The most recently priced SunEdison E and F tranches, as well as the C and D tranches, were down in line. The older A and B tranches, which are smaller due to company exchanges, actually expanded on the day by about 0.75 point, the trader said.

Shares of the St. Peters, Mo.-based solar technology company were down 21% at $18.05 at late morning.

The SunEdison 3.375% convertibles due 2025, which is the longer dated tranche of two tranches priced in May, fell more than 5 points to 85 initially and were last down close to 81 with the underlying common stock of the company at $18.20.

The shorter-dated 2.625% convertibles of the same vintage were also close to 81.

SunEdison’s older 0.25% convertibles due 2020 were last seen down more than 7 points to 94.5, but that was when shares were down by only 15%.

The SunEdison 2.75% convertibles due 2021, or the B tranche, were at 151.9, or down 17 points, but improved on swap.

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