Convertibles lower with month-end in focus; Impax slips below par; June primary falters

By Rebecca Melvin

New York, June 30 – Market players were trimming their holdings of U.S. convertibles Tuesday on the last day of the month and of the quarter. The moves followed broad-based weakness on Monday when the universe was characterized to have come in about 0.5 point on swap.

“Things are OK; we didn’t bring anything ‘in’ drastically further,” a New York-based sellsider said regarding Tuesday’s action.

Names in trade were random and name specific, the sellsider said. The tone was one of essentially “limping to the end to put June away.” There was not a lot of trading.

Impax Laboratories Inc.’s 2% convertibles, which priced last week, slipped below par while Impax shares fluctuated and ended just fractionally higher at $45.92.

“That’s not so good,” a trader said regarding the newer Impax Labs’ convertibles trading down below par.

There were no new issues launched or priced in U.S. convertibles, but Sony Corp. launched a deal in the international primary market. The Tokyo-based electronics company plans to price ¥120 billion of seven-year convertible bonds under Regulation S at a 40% initial conversion premium in mid-July.

Market players noted how much weaker this year’s June primary month was compared to June 2014.

For June 2015, there was $6.23 billion of new issuance in 13 deals, which was below June 2014 when there was more than $9 billion in 26 deals.

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