Convertible debt rises; SunEdison improves; Prospect Capital firm; Salesforce.com higher

By Stephanie N. Rotondo

Seattle, Feb. 22 – The convertible bond market was “just ticking up with the rest of the market, like it’s been wanting to for awhile,” a trader said Monday.

And while overall liquidity remained thin – Intel Corp. and the Priceline Group Inc., two very liquid names, made up the bulk of trading – there was some activity in names like SunEdison Inc. and Prospect Capital Corp.

SunEdison’s 2.375% convertible notes due 2022 “were pretty much unchanged,” a trader said, seeing the issue in a 12.25 to 12.5 context.

At the higher end, that was up about 0.25 point, according to the trader.

Another market source saw the issue rising nearly a point to trade with a 13 handle.

As for the equity underlying the bonds, it was initially up a nickel at $1.47 but ended the day at $1.43.

Last week, the struggling solar power company announced that it was shuttering factories and cutting jobs in an effort to turn itself around.

Under the plan, SunEdison will sell a silicon wafer factory in Malaysia and close a silicon factory in Texas. Operations in Oregon will be restructured.

The efforts will result in the loss of 220 jobs, the company said.

Additionally, the company will take a $435 million charge on its fourth-quarter results.

Meanwhile, business development company Prospect Capital “looks better,” a trader said, seeing the 5.875% convertible notes due 2019 trading “either side of 83.”

The trader said that was up about a point.

Another source echoed that level.

The stock closed up 12.5 cents, or 1.83%, to $6.95.

Salesforce rises

Salesforce.com’s 0.25% convertible notes due 2018 were trending higher Monday, just days ahead of the company’s earnings release.

A market source pegged the issue at 116 bid, 116.5 offered, up from levels around 114.5 on Friday.

The equity meantime surged $1.84, or 2.96%, to $63.98.

Salesforce is expected to release its latest quarterly results on Wednesday and expectations are higher. Sector peers Tableau and Qlik have thus far reported disappointing results, but given the more diverse nature of Salesforce, the market is anticipating its earnings will be better.

Mentioned in this article:

SunEdison Inc. NYSE: SUNE

Prospect Capital Corp. Nasdaq: PSEC

Salesforce.com NYSE: CRM

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