Morning Commentary: Peabody Energy again the top trader, bonds firm; AMD trends upward

By Stephanie N. Rotondo

Seattle, Oct. 24 – The convertible bond market was again being dominated by Peabody Energy Corp.’s 4.75% convertible junior subordinated debentures due 2066 on Monday, according to a trader.

The trader said the bonds were “back to Friday’s highs,” trading up half a point to a point outright from the open.

The paper traded in a range of 20 to 21 for most of the day Friday, hitting a high of 21.5.

The name has been on a tear of late, as coal prices have helped the overall sector – as well as investor sentiment – improve.

It was also reported Monday that Mangrove Partners Fund had taken a 5.2% equity stake in the bankrupt coal producer. The fund deemed the name “undervalued.”

Away from Peabody, Advanced Micro Devices Inc. was trading a bit. The name became notable on Thursday when the chip maker posted a second consecutive gain in revenue.

The streak was notable, as prior to the second quarter of 2016, AMD had seen four straight years of losses.

The 2.125% convertible notes due 2026 were trading at 107.75 at mid-morning, which compared to opening levels just south of 106.

The equity (Nasdaq: AMD) was up 24 cents, or 3.68%, at $6.76 in early Monday trading.

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