Morning Commentary: Peabody convertibles trade up; Blucora firms on asset sale; Iconix eyed

By Stephanie N. Rotondo

Seattle, Nov. 15 – The convertible bond market was seeing signs of strength in early Tuesday trading.

Peabody Energy Corp.’s 4.75% convertible junior subordinated debentures due 2066, for instance, were trading in a 26 area, according to a trader.

The trader said the paper traded as high as 27 in early dealings.

“They’ve been walking them up all day,” the trader said.

Coal names – Peabody in particular – have been strong since the election of Donald Trump, as his presidency is expected to have a more positive impact on fossil fuel-related energy producers.

Meanwhile, Blucora Inc.’s 4.25% convertible notes due 2019 were “up a little bit,” a trader reported, after it was announced that the company had agreed to sell its Monoprice unit for $40 million in cash.

The trader pegged the convertibles at 98 bid, 98.375 offered.

“It’s contextual,” the trader said of the gains. “They’re just following the stock around.”

The stock (Nasdaq: BCOR) was up 20 cents, or 1.48%, at $13.70 in early trading.

Iconix Brand Group Inc.’s 1.5% convertible notes due 2018 were also slightly better, as the market prepares for the company’s annual investor meeting.

The meeting is scheduled for 3 p.m. ET.

A trader said the bonds were “up a tiny bit” at 86.5 bid.

He noted that the paper was at 85 a week ago.

The equity (Nasdaq: ICON) was also a touch higher, moving up 3 cents at mid-morning to $9.67.

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