Morning Commentary: Convertibles see better bidders; Impax Labs jumps with positive FDA news

By Rebecca Melvin

New York, Sept. 8 – U.S. convertibles were moving higher on an outright basis, or in line with higher equities, early Tuesday to start the holiday-shortened work week following Labor Day. U.S. financial markets were closed on Monday.

The convertibles space was not yet in full gear following the holiday weekend, but things were “better to buy,” a New York-based trader said, referring to the fact that there were more bidders and generally nebulous offers.

Impax Laboratories, Inc.’s 2% convertibles due 2022 were up 3 points to almost 99, according to Trace data, as the common stock of the Hayward, Calif.-based specialty pharmaceutical company jumped 10% in response to positive FDA news.

Impax said it received written notice from the FDA that the company has successfully addressed issues raised in a 2011 warning letter related to its manufacturing facilities in Hayward.

“With the resolution of the warning letter, we are excited about the potential for approvals and launches of new products from this facility,” president and chief executive Fred Wilkinson said in a news release. Wilkinson also said that the company expects results to remain within the ranges of its previously issued guidance for full-year 2015.

Impax shares were up $4.14, or 10%, to $44.45 on Tuesday morning.

Priceline Group Inc.’s convertibles were up a point or two on an outright basis, and a few energy names were seen in trade. Whiting Petroleum Corp.’s 1.25% convertibles due 2020 were at 85, with the underlying shares of the company down about 1%, and Chesapeake Energy Corp.’s 2.5% convertibles due 2037 were up 1.375 points to 90, according to Trace data, with the common stock of the Oklahoma City-based energy company up more than 6%.

In addition, Peabody Energy Corp.’s 4.75% convertibles, which are severely distressed, were seen changing hands at 15, with the underlying stock up about 1%.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.