Morning Commentary: Convertibles quiet post Fed; valuations steady; Medicines trades flat to higher

By Rebecca Melvin

New York, Sept. 18 – U.S. convertibles were mostly quiet as the common shares underlying the paper fluctuated on Friday.

The equities markets overall were selling off with the major indices down about 1% as investors digested the Federal Reserve’s decision to keep its Federal Funds rate unchanged at near 0%.

Convertibles, which saw an expansion of about 0.25 point early Thursday leading into the announcement, were largely unchanged afterwards, and the same was true early Friday, a New York-based trader said.

“It’s kinda dead, actually,” he said.

Medicines Co.’s 1.375% convertibles due 2017 looked to be a little stronger early Friday with the underlying shares of the Parsippany, N.J.-based health care company down almost 1%. The bonds were at the high end of their current range however at 159.6, according to Trace data.

Other names that had been notably active in the past few days were quiet, including Vipshop Holdings Ltd. and Qihoo 360 Technology Co. Ltd.

Vipshop’s 1.5% bonds due 2019 were around 111.5 with the shares down nearly 1% at $17.40.

Qihoo’s 2.5% convertibles due 2018 were unchanged at 95.125 with the shares up 0.6% at $45.85.

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