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Morning Commentary: Pacira comes off highs; Nabors trends lower, in line with broader market
By Stephanie N. Rotondo
Seattle, March 9 – The convertible bond market was trending weaker in early Thursday dealings.
While the space was drifting lower, a trader remarked that it was “really quiet” overall.
Pacira Pharmaceuticals Inc.’s new $300 million of 2.375% convertible senior notes due 2022 continued to be on the active side, after pricing rich late Tuesday.
A trader said the convertibles came in to a 103.5 to 104 range, which compared to levels around 106 on Wednesday.
The company’s stock (Nasdaq: PCRX) was meantime down nearly 4% in early trading.
At pricing, the convertibles carried an initial conversion premium of 37.5%.
J.P. Morgan Securities LLC, Jefferies & Co. and RBC Capital Markets LLC ran the books.
Away from the new issue, Nabors Industries Ltd.’s 0.75% convertible notes due 2024 were called a point softer at 93.
The underlying equity (NYSE: NBR) was also lower, losing over 1.5% by mid-morning trading.
Despite the weakness in the name – which was driven by the broader market’s losses, nothing credit specific – a trader commented that “people still love the credit.”
Oil-linked names such as Weatherford International plc and Chesapeake Energy Corp. also remained under pressure on Thursday, following a more than 5% decline in crude prices on Wednesday. The declines came as the Energy Information Administration reported a larger-than-expected inventory build.
Domestic crude was off nearly 2% at mid-morning on Thursday.
Weatherford’s 5.875% exchangeable notes due 2021 were a shade lower at 126.75, according to a market source.
Chesapeake’s 5.5% convertible notes due 2026 were off about a point, trading around 94.5.
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