Beaten-down energy names better bid, but few trades seen in holiday-shortened session

By Rebecca Melvin

New York, Dec. 24 – There was a bid in some of the very illiquid energy convertibles on Thursday ahead of the session’s early close for Christmas Eve, market players said.

Traders noted better bidders on Wednesday and Thursday, but trades were light as market action wound down for the Christmas holiday, a New York-based trader.

Financial markets closed early on Thursday and will remain shut on Friday.

One of the illiquid energy names that saw a bid on Thursday was Hornbeck Offshore Services Inc. That company’s 1.5% convertibles due 2019 were bid at 53, which was “probably very low,” the trader said.

Shares of the Covington, La.-based provider of offshore supply vessels started off higher but pared early gains to end down 33 cents, or 3.1%, at $10.29 on the day.

The Hornbeck bond had been 52 bid, 56 offered on Monday, he said, adding that generally energy convertibles were a little stronger, following stocks upward.

On Wednesday, U.S. convertibles were firmer on thin volume as a 4% gain in crude oil prices supported equities.

Energy names have been butchered in the past month and a half along with their underlying shares as oversupply fears further depressed oil and other energy prices.

But Whiting Petroleum Corp.’s 1.75% convertibles traded at 71 on Thursday against shares of the Denver-based oil and gas exploration and production company that closed down 57 cents, or 5.4%, at $10.08.

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