Convertibles steady to end turbulent week; Intel up in line with shares; energy names up

By Rebecca Melvin

New York, Aug. 28 – U.S. convertibles ended the week on a quiet note on Friday after market turbulence sent equities, yields and convertibles plunging on Monday over a worrisome global growth picture. The losses followed a 5% decline in the Dow Jones industrial average and S&P 500 stock index during the last two days of the previous week.

Wednesday and Thursday brought market gains, and calm pervaded on Friday, with the major stock indices actually ending the week higher. But pricing for convertibles remained lower overall from where things started out, a New York-based sellsider said.

Among bonds in demand on Friday were Intel Corp.’s convertibles, which were trading up in line with the underlying shares of the Santa Clara, Calif.-based chip giant.

Several beaten-down energy names traded notably higher on Friday as crude oil prices continued to bounce from lows in the $39.00 per barrel context on Wednesday. West Texas intermediate crude jumped another 6.5% on Friday to $45.32 per barrel, adding to a 10% rally on Thursday.

Energy convertible paper that was higher included Energy XXI (Bermuda) Ltd.’s 3% convertible notes due 2018, which rose to about 14.5 from 9 previously and Peabody Energy Corp.’s 4.75% convertibles due 2066, which traded up to 14.75 from 11.9 last.

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