Convertibles gain in well-bid market; Cobalt improves, but oil slides; Cemex, Fiat up

By Rebecca Melvin

New York, Dec. 18 – U.S. convertibles improved across the board on Thursday, albeit in quiet trade, strengthening in tandem with higher shares and better credit. But oil prices, which started out better, resumed their slide intraday.

Some energy convertibles were stronger for a second straight day. Cobalt International Energy Inc.’s convertibles rose and were said to have recouped about 0.5 point to 0.75 point on swap as shares of the Houston-based oil and gas exploration and production company rose 1.8%.

Energy XXI Ltd. pared some of its early gains but was still positive for a second straight day, despite a retrenchment in the underlying shares of the Houston-based oil and gas E&P company.

The convertibles of Cemex SAB de CV traded up in tandem with higher shares of the Monterrey, Mexico-based cement producer.

The sister Cemex convertible issues were “all better to buy,” a New York-based trader said, indicating that there was a strong bid for the paper but not necessarily a lot of offers.

The trader said that his firm hadn’t traded any E&P names, but there was a “hodge podge” of issues in various sectors that were better bid.

“More people are adding risk,” he said.

Elsewhere, Fiat Chrysler Automobiles NV’s mandatory convertible traded up amid a strong bid, as shares added, but closed off their highs for a fractional gain.

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