Convertibles end quarter on lackluster note, but quarter overall was good; Whiting strong

By Rebecca Melvin

New York, March 31 – U.S. convertibles put in a lackluster trading session to end the first quarter on Tuesday, with no discernable trends capping off the old quarter or indicative of strategies going forward in the new one, market players said.

“Everything is pretty name-specific; there’s no real theme,” a New York-based trader said.

In the past few sessions volatility has been light, but for the quarter, vol. and credit have been better and that has helped convertibles put in a pretty solid performance, a second New York-based sellsider said.

In addition, the existing space has crept up a little bit in terms of valuation this past month as there has been a lack of new issuance, a third source said.

There has been a good volume of issuance, at about $15.5 billion for the year so far, but a fewer number of deals.

The HFRX convertible arbitrage index for March is up about 0.25%, but for the year to date, it is up 1.6%.

DDR Corp. and the SanDisk Corp. convertibles were mentioned in trade early Tuesday, and Whiting Petroleum Corp. also continued to trade, with that issue continuing to gain after the Denver-based oil and gas exploration and production company priced $1 billion of the convertibles last week.

Tesla Motors Inc.’s convertibles were also trading some, and those issues were said to be in line, or flat, relative to the underlying shares, which were a bit lower on the day, a trader said.

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