Convertibles mostly quiet; Ctrip.com deals slip on swap; Chesapeake Energy issues weak

By Rebecca Melvin

New York, June 22 – U.S convertibles saw follow-on action in the Ctrip.com International Ltd. deals, which debuted in the market on Friday. Ctrip.com shares gained 3% on the day, and both Ctrip.com tranches were said to have come in about 0.125 point on a swap basis.

There was also some trading of Anthem Inc.’s 2.75% convertibles due 2042 in response to the health insurer’s bid for rival Cigna Corp. for $47 billion. Anthem reaffirmed its commitment to the merger after Cigna rejected the offer.

The high-dollar price Anthem bonds traded uninspiringly in line with their underlying shares, which were up 4.7%.

“There was a good amount of volume in anthem,” a New York-based trader said.

Otherwise there was little impact from M&A news on the tape and a stronger equity market, sources said. Convertibles were quiet.

Natural gas was weaker again, and that was taking a toll on Chesapeake Energy Corp.’s convertible bonds and preferred shares, a New York-based trader said.

Chesapeake’s 2.25% convertibles were trading around 88, compared to 92 about a month ago, the trader said.

Chesapeake’s 2.5% convertibles changed hands at 96.25, which was down from a recent level at 97.5.

The Chesapeake 2.5% convertible is shorter-dated than the 2.25% issue and less affected by natural gas prices.

Surpluses in natural gas have weakened pricing.

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