Morning Commentary: Ares Capital steady after earnings miss; Priceline trades a little higher

By Rebecca Melvin

New York, May 4 – U.S. convertibles were trading quietly early Monday with a number of earnings reports on tap for the day and as equities traded firmly higher.

A couple of Ares Capital Corp.’s convertibles were trading after the New York-based business development company reported earnings per share that missed estimates by a couple of cents.

Ares, a serial convertibles issuer, saw its 5.125% convertibles due 2020 change hands at 103.75, which was little changed on the day, and its 4.75% convertibles due 2018 trade down about 0.5 point at 105.25, according to Trace data.

Shares of the company were off 22 cents, or 1.3%, at $16.72.

Ares Capital reported lower first-quarter earnings of $100.6 million, or 32 cents per share, compared to $117 million of earnings, or 39 cents per share, in the year-earlier period. Excluding items, earnings for the latest quarter were 37 cents per share, which missed most analysts’ forecasts by a few cents.

Ares chief executive officer Kipp deVeer said in the release, “We are pleased with another strong quarter of earnings for ARCC and credit quality remains strong. Our portfolio rotation strategy has proven to be successful, enabling us to increase our overall portfolio yield again this quarter. We also realized gains on some of the equity co-investments in our portfolio, contributing to an attractive total return on our investments.”

Priceline Group Inc.’s 0.35% convertibles were up a point or more at 199.5 in the early going, according to Trace data, against shares for the Norwalk, Conn.-based internet travel services company, which were up about 1% at $1,272.

Priceline’s 1% convertibles due 2018 changed hands at 143.425, which was up 1.75 points.

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