Morning Commentary: Convertibles still under fire but ‘holding in’ for the most part; Iconix better

By Rebecca Melvin

New York, Aug. 20 – U.S. convertibles continued to trade lower on Thursday as equities extended losses. But convertibles selling was orderly and generally “holding in” on a swap, or hedged, basis, a New York-based trader said.

Many of the same names were trading Thursday as on Wednesday, with pricing on an outright basis lower.

Among technology names, the Intel Corp. 2.95% convertibles continued to trade actively and were down another 0.5 point or so, with the underlying shares of the chipmaker down 1%.

The bonds traded at 116 against shares that were down 33 cents at $28.03.

Most things were not gapping down, the trader said.

But NXP Semiconductors NV joined the list of volume names, with the NXP 1% convertibles seen trading down 3 points to 107 against shares that were down 3% at $84.10.

Others that continued to move down most notably included Ctrip.com International Ltd., SunEdison Inc. and Chesapeake Energy Corp.

But the Iconix Brand Group Inc.’s 2.5% convertibles held up, the trader said. The Iconix bonds were last quoted at 95.25 bid, 95.75 offered.

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