New issues provide diversion amid market downdraft

By Ronda Fears

Nashville, Tenn., April 29 - As the market downdraft continue to blow convertibles southward, traders said there were some bargain hunters foraging the busted universe and scouring a vast group of names with sell offers.

Meanwhile, the market's collective head turned to new issues as at least $1.75 billion of paper is slated to price this week.

"Everyone is on pins and needles right now, waiting for the next blowup," said a convertible trader at a major investment bank in New York.

"WorldCom is in a world of hurt, but the pain is everywhere right now. Convertibles are in a weird place, valuations. We're still seeing quite a bit of fixed income buyers, because there's so many busted converts."

WorldCom's debt troubles have continued to drag the securities lower, and with the stock at $2.35 most convertible market watchers and players don't think a traditional convert or even a mandatory would fly right now.

One observer said even if WorldCom tried to sell a convertible on swap, like several deals of late, the company probably could not do a deal big enough to raise the kind of capital it needs because the stock buyback reduces the proceeds to the issuer.

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