Morning Commentary: Convertibles rise with stock market; SunEdison steady; Prospect Capital firm

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 early 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.

As for the equity underlying the bonds (NYSE: SUNE), it was up a nickel at $1.47.

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

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.

The stock (Nasdaq: PSEC) was up 8 cents, or 1.1%, at $6.90 in early trading.

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