Airlines come under some pressure as oil prices continue to rise; Saks climb persists on asset sale rumors

By Sara Rosenberg

New York, April 1 - Airlines such as JetBlue Airways Corp., AMR Corp. and Delta Air Lines Inc. came in a little bit on Friday as oil prices ran up by close to $2 a barrel to $57 plus change a barrel. In other doings, Saks Inc. continued to climb on asset sale buzz and Universal Health Services Inc. saw some volume, probably as a new buyer decided to get involved in the name.

JetBlue's 3.75% convertible due 2035 dropped by about 2¾ points to 96.125 bid, 96.625 offered and its 3.5% convertible due 2033 dropped by nearly three quarters of a point to 87.06 bid, 87.56 offered, according to a trader. The Forest Hills, N.Y.-based airline's stock closed at $18.40, down $0.64 or 3.36% on the day.

Meanwhile, AMR's 4.25% convertible due 2023 fell off by a little over 1 1/8 points to 84 bid, 85 offered and its 4.5% convertible due 2024 dropped by approximately 7/8 to 78.37 bid, 79.37 offered, the trader said. The Fort Worth, Tex.-based parent to American Airlines saw its stock fall $0.25 or 2.34% on the day to $10.45.

Lastly, Delta's 8% convertible due 2023 dipped by about an eighth to 40.93 bid, 42.93 offered and its 2.875% convertible dipped by close to a quarter of a point to 39.41 bid, 39.91 offered, the trader added. The Atlanta-based airline saw its stock fall $0.02 or 0.49% on the day to $4.03.

Saks gains continue

Saks 2% convertible moved up by about two to 2½ points on the day to 108 bid, 109 offered versus a closing stock price of $18.60 as rumors of potential asset sales continue to excite investors, according to a trader.

On Thursday, the convertible gained about five or six points on the day to 105¾ bid, 106¾ offered versus a stock price of $18.

New talk surfaced on Thursday that the company may sell the Saks Fifth Avenue chain in addition to the regional department stores that were already rumored to be on the chopping block.

The Birmingham, Ala.-based retailer's stock closed up $0.55, or 3.05%, at $18.60.

Quoting executives close to the company, the New York Times reported Thursday that Saks has put its regional department stores up for sale and is considering selling the Saks Fifth Avenue chain. Goldman Sachs and Citigroup have been hired to explore strategic alternatives for the properties, the newspaper cited the executives as saying.

Universal Health active

Universal Health Services' 0.426% convertible saw "some volume" on Friday at basically unchanged levels of 61¼ mid-price versus a closing stock price of $52.34, which was down $0.06 or 0.11%, according to a trader.

"Maybe someone just woke up and decided to add them to their portfolio. I think it was the beginning of the quarter so if somebody was going to put in a new position they would do it now," the trader explained.

Overall, it was a quiet day, which is why the volume in Universal Health somewhat stood out, the trader explained.

"Watching crude, natural gas keep going higher. Kind of an ugly day. Trying to find buyers of stuff - kind of a difficult thing right now. Can't say that I noticed a whole lot of volume in anything really," the trader said.

"This morning it was economic numbers and this afternoon it was watching the Pope" - who according to reports was near death Friday with his heart and kidneys failing.

"This [felt like] a Friday before a long holiday weekend," the trader added, referring to the amount of activity that was seen in the overall convertibles market.

Universal Health is a King of Prussia, Pa.-based owner and operator of acute care hospitals, behavioral health centers, ambulatory surgery centers and radiation oncology centers.

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