Micron weakens again; Arconic in recovery mode; Acorda convertibles edge up with stock

By Stephanie N. Rotondo

Seattle, July 3 – Trading in the convertible bond market on Monday was quite low, due in large part to the bond market closing early ahead of the July 4, according to a trader.

Still, investors continued to focus on names that had been notable on Friday.

For instance, Micron Technology Inc.’s 3% convertible notes due 2043 remained weak following Friday’s sell-off.

A trader called the bonds down 1.5 points around 112.25.

Another market source saw the issue hitting lows just south of 110, though most of the day’s trades occurred in a 112.75 to 113.25 context.

As for the underlying stock, it was off 72 cents, or 2.41%, at $29.14.

The convertibles – as well as the stock – were pressured on Friday, despite an earnings report out late Thursday that beat expectations.

The company also issued improved guidance.

For the third fiscal quarter, the Boise, Idaho-based chip maker posted net income of $1.65 billion, or $1.40 per share. That compared to income of $894 million, or 77 cents per share, during the second fiscal quarter.

Micron also said on Friday that its share price had triggered a contingent convertible feature on four series of convertible notes, its 2.375% convertible senior notes due 2032, 3.125% convertible senior notes due 2032, 1.625% convertible senior notes due 2033 and 2.125% convertible senior notes due 2033.

Arconic Inc.’s 5.375% series 1 class B mandatory convertible preferred stock (NYSE: ARNCPrB) was meanwhile attempting a modest rebound following a slug of bad news for the company.

The convertible preferreds rose 30 cents to $26.10. The issue had retreated nearly 2% on Friday as it was reported that a faulty engine part made by the company might have delayed the launch of Boeing Co.’s 737 Max jet in May.

Prior to the Boeing news, Arconic had been in the headlines due to revelations that one of its products was used in the cladding system at Grenfell Tower in London, which caught fire in early June, killing about 80 people and injuring at least 70 others.

Arconic’s stock was also looking to recover, adding 19 cents to close at $22.84.

Elsewhere, Acorda Therapeutics Inc.’s 1.75% convertible notes due 2021 were “tracking” the stock, a trader reported.

He saw the convertible debt ticking up nearly ˝ point to around 85.875.

As for the company’s common shares, they were up 40 cents, or 2.03%, at $20.10.

Last week, it was reported that Acorda had filed a new drug application for its Parkinson’s disease drug. The company had previously announced positive trial results on the treatment, which is being touted as a treatment for OFF-period symptoms related to the disease.

Mentioned in this article:

Arconic Inc. NYSE: ARNC

Acorda Therapeutics Inc. Nasdaq: ACOR

Micron Technology Inc. Nasdaq: MU

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