Morning Commentary: Chesapeake Energy’s 2.5% convertibles come in; PDL BioPharma’s 4% bond in line

By Rebecca Melvin

New York, Aug. 19 – Chesapeake Energy Corp.’s 2.5% convertibles due 2037 traded higher on an outright basis in the early going Tuesday as shares of the Oklahoma City-based natural gas company rose. But the convertibles contracted on a dollar-neutral, or hedged, basis, a New York-based trader said.

Chesapeake’s 2.5% convertibles (Cusip: 165167BZ9) traded at 103.375 bid, 103.5 offered, the trader said, and “looked lower by 0.5 point.”

Chesapeake shares were up 2%.

Chesapeake has another 2.5% convertible due 2037 that didn’t appear to be trading on Tuesday.

Elsewhere, PDL BioPharma Inc.’s 4% convertibles due 2018 “traded some,” a second New York-based trader said.

The PDL BioPharma 4% convertibles were quoted at 109.75 bid, 110.75 offered with stock around $9.38, which was up better than 0.5%.

The notes “Look in line with where they had been after having come in a couple of weeks ago with everything else,” the trader said.

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