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Morning Commentary: Convertibles leveling off after strong start; Pandora up 1.5 points to 2 points
By Rebecca Melvin
New York, Dec. 17 – U.S. convertibles were better across the board early Thursday along with higher shares on the heels of the first Fed rate hike since 2006, but as the morning progressed and stocks fell back, convertibles leveled off, a New York-based trader said.
“They were a lot better, up on average 0.25 point, but now they are rolling over with stocks and leveling off,” the trader said.
Pandora Media Inc.’s convertibles expanded on swap by 1.5 points to 2 points after a ruling by the copyright royalty board provided clarity on Pandora’s future financials.
The internet radio company, along with others of its ilk, will pay more for music played, but not as much as record companies and artists had hoped.
Under the federal Copyright Royalty Board’s ruling, Pandora will pay 17 cents for every 100 times its free radio users listen to a song and 22 cents per 100 times for paying subscribers.
Pandora’s 1.75% convertible due 2020, which was issued earlier this month, traded up to 113.5 versus an underlying share price of $15.00. That was up 1.5 points to 2 points on a swap basis, a trader said.
Pandora shares were last up $1.73, or nearly 13%, to $15.17.
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