Morning Commentary: DISH Network most active in convertibles market; Cobalt stays on radar

By Stephanie N. Rotondo

Seattle, Aug. 4 – DISH Network Corp.’s new $2.5 billion of 3.375% convertible notes due 2026 continued to dominate trading in the convertible bond market early Thursday.

The issue priced Wednesday, coming upsized from $2 billion and with an initial conversion premium of 32.5%.

Initial price talk was 3.125% to 3.625%, a market source reported. The initial conversion premium was expected to be 30% to 35%.

In early trades, the paper was seen at 104.375.

“All the trades are right around there,” a trader said.

And while the stock had moved higher after the deal priced, it was sliding back down come Thursday trading.

The equity (Nasdaq: DISH) was off 42 cents at $50.90 in early trades.

Meanwhile, Cobalt International Energy Inc. also continued to be on the active side.

However, a trader noted that the 2.625% convertible notes due 2019 were holding at levels seen on Wednesday, placing the issue at 38.5.

“That’s exactly where they were yesterday,” the trader said. “They are trading up a storm at that same price today.”

He did note that the 3.125% convertible notes due 2024 “might have come in a little bit,” trading in a range of 32.125 to 32.5.

“It’s surprising that they spread out that much,” he commented.

The stock (NYSE: CIE) meantime continued to try to edge up over a buck, adding just half a cent to $1.045 at mid-morning.

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