Midday Commentary: Tesla jumps outright, unchanged on hedge; American Energy Partners prices

By Rebecca Melvin

New York, Feb. 20 - Tesla Motors Inc.'s convertibles jumped on an outright basis in early trade on Thursday but were essentially unchanged to up slightly on a dollar-neutral, or hedged, basis after the Palo Alto, Calif.-based electric car maker reported strong quarterly results that were better than expected, market sources said.

Tesla's 1.5% convertibles due 2018 were quoted at 177.5 bid, 178 offered versus an underlying share price of $207.50, a New York-based trader said. That was up from 169.25 versus an underlying share price of $195.50 late Wednesday. Tesla shares jumped about $15.00, or 8%, to $208.64 in early trading Thursday.

In the primary market, American Energy Partners LP priced an upsized $750 million of seven-year convertibles through its affiliate American Energy - Utica LLC late Wednesday.

The American Energy Partners 3.5% convertibles due March 1, 2021 convert on a contingent basis into the company's initial public offering of common stock. They are also callable upon an IPO.

A syndicate source said that allocations of the 3.5% convertibles included hedged investors, and the bonds were trading in the aftermarket. But a price level on the bonds was not available.

The deal was upsized from an initially talked $500 million in size.

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