Morning Commentary: Convertibles primary remains quiet; Tesla Motors adds after earnings miss

By Rebecca Melvin

New York, Nov. 4 – The U.S. convertibles primary market was quiet again early Wednesday, and the same could be said for primary markets internationally. None of these markets has seen a deal this week.

In secondary market action, there were a number of company earnings reports, including that of Tesla Motors Inc., which has a trio of convertible bonds in play. But the main focus of convertibles players on Wednesday was health care convertibles, a New York-based trader said.

There was a continuation of trade in AMAG Pharmaceuticals Inc.’s convertibles, which plunged on an outright basis in active trade on Tuesday after the Waltham, Mass.-based specialty pharmaceutical company reported quarterly results that missed estimates. AMAG common shares extended losses Wednesday, trading down another 1.9%, after dropping 23% on Tuesday.

Elsewhere in health care, Amarin Corp. reported earnings, as did Regeneron Pharmaceuticals Inc. and Array BioPharma Inc. But a notable focus was Anthem Inc., the Indianapolis-based health benefits company, which saw its 2.75% convertibles trading a little lower in tandem with the underlying shares at 182 bid, 182.875 offered versus an underlying share price of $133.75, a Connecticut-based trader said.

Anthem also has $1.25 billion of convertible equity units in the market.

The Tesla convertibles added several points each as the underlying shares traded up 10% as investors looked past a miss on quarterly earnings and were cheered by higher car production figures.

The Tesla 0.25% convertibles, or the A tranche, due 2019 changed hands at about 93.25, which was up from 90.42, according to Trace data. And the Tesla 1.25% convertibles, or the B tranche, due 2021 traded at 91.5, which was up from 88 and change on Tuesday.

Tesla shares jumped $20.78, or 10%, to $229.00 at midday on Wednesday.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.