Morning Commentary: Hess convertibles trade with higher oil prices; market activity ‘super quiet’

By Rebecca Melvin

New York, July 25 – Hess Corp.’s 8% mandatory convertible was trading a bit early Wednesday, likely due to a jump in oil prices, and there were a few other mandatories trading perhaps in tandem with upcoming maturities.

But market activity overall in convertibles was “super quiet,” a New York-based market source said.

The mandatories of the New York-based oil and gas producer were quoted down 3% at $70.38, while Hess common shares were down $1.03, or 1.6%, at $64.04.

The price of the front-month contract of West Texas Intermediate crude oil gained 72 cents, or 1.1% to $69.23 on the New York Mercantile Exchange.

Overall market activity was surprisingly quiet with only $135 million of bonds having changed hands according to Trace data, the market source said.

“There is no clear cut direction,” the source said, adding that activity in mandatories was likely related to investors trimming prior to end-of-life mandatory conversions.

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