Morning Commentary: Peabody Energy in focus after earnings warning; Priceline adds with shares

By Rebecca Melvin

New York, July 1 – Peabody Energy Corp. was in focus among convertibles players early Wednesday after the St. Louis-based coal company issued a warning on second-quarter earnings that shot down its common shares by 24%.

Only odd pieces of the Peabody convertibles were said to have traded by late morning, however. A New York-based trader said he expected round lots of Peabody’s 4.75% convertible due 2066 to drop in trade to around 10 or lower.

The Peabody convertibles were last in the 15 to 18 range.

“[Peabody] has a 10-22 second lien that came in March and priced at 97.5. It will hopefully pay its first coupon in September. It is trading at 59.5 now,” the trader said.

Priceline Group Inc.’s convertibles also showed up in trading action Wednesday, which was the first day of the third quarter.

Priceline’s 0.9% convertibles due 2021 traded at 95.66, which was up 0.272 point, according to Trace data.

Priceline’s 0.35% convertibles due 2020 changed hands at 112, which was up from 110 on Tuesday.

Shares of the Norwalk, Conn.-based internet travel services company were last up about 1%, or $10.00, at $1,160.

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