New Source launches; Isis adds on swap; Ares Capital steady to mixed after earnings miss

By Rebecca Melvin

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

The primary market was quiet, although there was a small preferred deal launched by New Source Energy Partners LP for $40 million, which was expected to price late Tuesday.

A number of earnings reports are due out this coming week, and until the earnings season cycles through, very little new issuance is expected.

Meanwhile, there was little to no follow-through in the secondary market from last week, sources said. The biotechnology sector remained well bid, however, a New York-based trader said.

In biotech, Isis Pharmaceuticals Inc.’s 1% convertible bonds traded up 4 or 5 points on an outright basis on Monday and added 0.25 point on a dollar-neutral, or swap, basis, after news that the Carlsbad, Calif.-based developer of gene-based therapeutic drugs sold a chunk of one of its drugs to Bayer AG in exchange for royalties.

Some 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. There were outright investors selling one Ares convertible and buying another, a trader said.

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