Gilead Sciences active, trading below parity; Priceline off a bit; USEC convertibles flat

By Rebecca Melvin

New York, Aug. 18 –A good chunk of Monday’s U.S. convertibles’ trading was composed of Gilead Sciences Inc., which was trading below parity as Gilead stock notched a new high.

The move seemed related to technicals as sellers in the name appeared ready to put their money to work elsewhere, and there didn’t appear to be any company-specific news that would have moved the securities that much, a Connecticut-based market source said.

Aside from Gilead, which was the single biggest name by volume, recent new issues accounted for the bulk of remaining trade. These names included Priceline Group Inc., AOL Inc. and Jazz Pharmaceuticals plc, a Dublin-based pharmaceutical company.

“It’s been that way for a couple of weeks,” a Connecticut-based trader said, referring to the concentration of trading action in new issues.

The most recent new issue was Priceline’s 0.9% convertibles due 2021, which debuted in the secondary market on Friday. Those notes were seen at 98 bid, 99 offered in early trading on Monday, according to a syndicate source, which was a little lower compared to 98.5 bid, 99.5 where they went out on Friday and compared to the 99 reoffer price at which the paper started.

Elsewhere, USEC Inc.’s distressed 3% convertibles traded actively but were little changed at about the 32.125 mark after news that noteholders have approved the company’s plan of reorganization and a confirmation hearing has been set for Sept. 5.

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