Morning Commentary: Convertible bond go-gos like Priceline, Tesla trade; Chesapeake gains ground

By Stephanie N. Rotondo

Seattle, April 12 – Trading in the convertible bond market remained subdued on Wednesday, in part because of holidays that were keeping people out of the office and in part because the market was prepping for Thursday’s kick-off to bank earnings season.

Of the day’s early dealings, Priceline Group Inc.’s 0.9% convertible notes due 2021 continued to see some action, despite any fresh news to act as a catalyst.

In early trading, the convertibles were off a shade at 112.15, according to a market source. That coincided with a less than 0.1% decline in the underlying equity (Nasdaq: PCLN).

Meanwhile, Tesla Inc.’s 1.25% convertible notes due 2021 were inching upward as it was reported the company was looking to add new members to its board of directors.

The company reportedly wants to make the board changes in order to respond to critics who say that current board is too close to Elon Musk, chief executive officer and founder of the Palo Alto, Calif.-based car manufacturer.

The 1.25% convertibles were pegged near 102.5 against a stock (Nasdaq: TSLA) price of $307.56.

Chesapeake Energy Corp.’s 5.5% convertible notes due 2026 were also on the move in early trading. A market source saw the issue around 107.5, a gain of about 1.5 points on the day.

As for the company’s shares (NYSE: CHK), they were up nearly 2% as management prepared to present at the Goldman Sachs Houston Credit Investor Conference on Wednesday.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.