Energy convertibles resilient despite failed talks to limit oil output; Jarden in focus

By Rebecca Melvin

New York, April 18 – Energy convertibles were better on Monday after initially trading at slightly lower pricing but with a stronger bid following news that global oil producers failed to agree to freeze output at a meeting Sunday in Doha, Qatar.

Russia and members of the Organization of Petroleum Exporting Countries could not negotiate an agreement largely because Iran, which has been exporting more oil following the lifting of economic sanctions on that country, was reluctant to agree to production limits and then Saudi Arabia also declined to agree to limits.

Whiting Petroleum Corp. actually ended up on the day, and Chesapeake Energy Corp. was mostly firm.

Jarden Corp.’s convertible were in focus in early trading after its acquisition by Newell Rubbermaid Inc. was completed on Friday. Jarden set make-whole conversion rates for the notes that are convertible up to the fundamental change repurchase date of April 25.

Jarden’s 1.125% convertibles due 2034 traded a little and were higher by about a point to 129. The other two Jarden notes, including the 1.875% convertibles due 2018 and the 1.5% convertibles due 2019, trade essentially like stock surrogates and were not in focus for many convertibles traders.

The Jarden convertibles that are not converted will revert to Newell Rubbermaid, or Newell Brands as the new company will be known as. There is no change in valuation in terms of credit as both are good credits, a New York-based trader said.

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