Convertible bonds rally in midweek trades; SunEdison under pressure; Energy XXI declines

By Stephanie N. Rotondo

Phoenix, Sept. 30 – The convertible bond market was looking to rebound going into month-end trading after spending the beginning of the week on a slide.

“Everything is up today,” a trader said. “Everything is green – marginally. Nothing looks like it’s motoring [up].”

The trader added that while the tone was positive, volume was muted.

Still, some names were ending with a weaker tone.

SunEdison Inc.’s paper remained active but continued to retreat. A trader said that all of the company’s convertible issues were trading, though the 0.25% convertible notes due 2020 – a Rule 144A deal – was the most active.

He saw the paper trading in a range of 57 to 58.25, which compared to 58.5 to 60 on Tuesday.

“I’m looking at the trades; they are all sales,” the trader said. “People are bailing out.”

Another market source saw the bonds closing off even further to around 55.5.

While the bonds were weak, the stock underlying the notes was up, rising 52 cents, or 7.81%, to $7.18.

Energy XXI Ltd.’s 3% convertible notes due 2018 were also a touch softer, according to a source.

The source placed the bonds in a 9.25 to 9.5 context, a level that was echoed at another desk.

The equity improved, however, rising a dime, or 10.31%, to $1.05.

The weakness in the Houston-based oil and gas producer’s debt came after the company reported its fiscal fourth-quarter and year-end results late Tuesday.

© 2015 Prospect News.
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