Bellwether convertible issues in focus; DISH, Tesla bonds move with stock; Quidel gains

By Stephanie N. Rotondo

Seattle, July 18 – A convertible bond trader said trading volume was once again muted on Tuesday, with go-to names like Intel Corp., Priceline Group Inc. and DISH Network Corp. taking up most of the day’s liquidity.

For its part, DISH convertibles were following the stock lower. While there was no credit-specific news out to cause the weakness, rival Netflix did release its quarterly results late Monday, showing an uptick in subscriber growth.

As for the convertible bonds, a market source saw the 2.375% notes due 2024 dipping about half a point to around 107.75. The 3.375% convertible notes due 2026 were initially off a like amount but finished about unchanged around 125.655.

The company’s stock was down 34 cents to $65.53.

Tesla Inc. was another name where the convertibles were moving along with the equity.

The company’s stock firmed $8.67, or 2.71%, to $328.24, as it was announced that two new board members were appointed. The members – James Murdoch, of Murdoch Family fame, and Linda Johnson Rice, of Johnson Publishing Co. – are outsiders to the company. Neither has any experience in the automotive or energy realms, but do have media experience, which could provide benefits going forward.

With the stock increasing, both the 2.375% convertible notes due 2026 and the 0.25% convertible notes due 2019 added a deuce apiece.

A source pegged the 2.375% convertibles around 119.5 and the 0.25% convertibles around 109.5.

Meanwhile, a trader said that Quidel Corp. was again notable on the day. The company’s 3.25% convertible notes due 2020 got a sizable bump on Monday when it was reported that Quidel was buying the Triage MeterPro cardiovascular (CV) and toxicology assets, as well as the B-type Naturietic Peptide (BNP) assay business run on Beckman Coulter analyzers from Alere Inc.

Those gains continued into Tuesday trading, as a trader saw the bonds moving up to 135 versus a $28.00 stock price.

“They were continuing higher,” he said.

A second market source also placed the paper around 135, which was called up 10 points.

The underlying shares gained $3.24, or 9.50%, to close at $37.36.

Quidel will pay $440 million for the assets. Alere is looking to divest the businesses as part of its plan to merge with Abbott Laboratories.

Mentioned in this article:

DISH Network Corp. Nasdaq: DISH

Quidel Corp. Nasdaq: QDEL

Tesla Inc. Nasdaq: TSLA

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