New, upsized Oasis Petroleum convertibles drop below par; new AMD bonds regain footing

By Rebecca Melvin

New York, Sept. 14 – Oasis Petroleum Inc.’s newly priced 2.625% convertibles due 2023 traded down upon release for secondary market dealings on Wednesday after the Houston-based oil and gas company priced an upsized $275 million of the senior notes at a coupon that was fixed at launch and the cheap end of premium talk.

The registered convertible was initially expected to be $250 million in size. Its greenshoe was downsized to $25 million from an initially talked $37.5 million.

The new bond was quoted at 98.125 bid, 98.875 offered at late morning versus a price for the underlying stock at $9.24.

A second source put the bonds are little better at 98.625 bid, 99.625 offered versus a stock price of $9.25.

On a swap basis, they were going to be trading on a 68% delta, the first source said, and therefore the bond was seen lower on a swap basis. But the second source put the delta higher in the mid-70% range, and at that level the bond did better on swap.

The Oasis common shares closed down 56 cents, or 5.8%, at $9.14.

Meanwhile, Advanced Micro Devices Inc.’s 2.125% convertibles regained par after several days of losses took the paper down to 97 since its debut in the market on Friday. The bond traded last at 100.75 against shares that were about $6.04.

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