Integrated Device Technology drops outright, slips on swap; Chesapeake underperforms

By Rebecca Melvin

New York, Feb. 2 – U.S. convertibles were mostly quiet as equity markets and bond yields came in and crude oil prices moved lower. But there were situations that sparked company- and sector-specific trade.

Integrated Device Technology Inc.’s convertibles plunged on an outright basis but were down just 0.5 point on a dollar-neutral, or hedged, basis on Tuesday as the underlying shares tanked 27% after mixed analysts’ ratings on its Zentrum Mikroelektronik Dresden AG, or ZDMI, acquisition, a New York-based trader said.

Integrated Device also offered up disappointing guidance but positive fiscal third-quarter results after the market close on Monday.

Chesapeake Energy Corp.’s convertibles fell, underperforming the underlying shares of the Oklahoma City-based natural gas producer, as crude oil prices dropped back by more than 5% to under $30.00 per barrel.

Meanwhile, Cheniere Energy Inc.’s convertibles outperformed shares of the Houston-based liquefied natural gas company, which fell $2.17, or 7%, to $27.15, a New York-based trader said.

Cobalt International Energy Inc.’s 3.125% convertibles were quiet despite a 15% slide in the underlying shares of the Houston-based oil and gas company.

Oil prices dropped back sharply, with West Texas Intermediate crude oil for March delivery falling $1.76, or 5.6%, to $29.86 per barrel.

Elsewhere, Yahoo! Inc.’s 0% convertibles traded little changed ahead of the internet company’s quarterly results, which were to be released after the market close.

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