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Morning Commentary: New, old SunEdisons untraded as market digests exchange news
By Rebecca Melvin
New York, Jan. 7 – SunEdison Inc.’s 5% convertibles due 2018, which is the new $225 million convertible note that the company has agreed to issue in exchange for parts of its older convertible issues, saw an early market at 90 bid, 92 offered but was untraded, as far as one market source knew.
The older convertibles, of which about $740 million were exchanged, were very quiet, he said.
Market players are “digesting the news” he said.
SunEdison’s 2.75% convertibles due 2021 didn’t look to have traded and were last at 54. And the SunEdison 2% convertibles due 2018 were also untraded and last at 64.
SunEdison shares tanked on the exchange news and were last down 21% at $4.38.
“The company needed the money and it was good for the guys that participated in the exchange, but not so good for the holders that didn’t participate,” the market source said.
Elsewhere, Cobalt International Energy Inc. was trading weakly again. The Cobalt 2.625% convertibles slipped about another 0.5 point to 54.25 with shares down 12 cents, or 2.6%, at $4.59.
The Cobalt 3.125% convertibles changed hands at 47.50 after ending at 48 on Wednesday.
West Texas Intermediate crude oil for February delivery was down another 34 cents, or 1%, to $33.63 per barrel, after tanking $1.91, or 5%, to $34.06 per barrel on the New York Mercantile Exchange on Wednesday.
Broad-based selling of equities early Thursday marked the beginning of yet another session this week as concerns about China continued to fester even as the Chinese government invoked circuit breakers to stop trading on the Shanghai Stock Exchange for the second time this week. Further declines in oil prices also put a damper on the markets.
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