Morning Commentary: SunPower 0.75% convertibles off 2 points on swap; Ciena convertibles drop

By Rebecca Melvin

New York, Dec. 10 – SunPower Corp.’s existing 0.75% convertibles traded at 111 versus a share price of $23.04, which was down 2 points dollar neutral, or on a swap basis, early Thursday on the heels of the pricing of a new SunPower convertibles issue, a New York-based trader said.

The newly priced SunPower 4% convertibles were not heard yet in trade after the San Jose, Calif.-based solar power company priced an upsized $400 million of the seven-year senior debentures at the cheap end of talked terms.

The SunPower deal was initially talked at $350 million in size.

The SunPower 0.875% convertibles were also not seen yet in trade.

SunPower shares were down a lot before the market open but had pared losses for only a small decline by mid-morning, a trader noted.

Elsewhere, SunEdison Inc. remained active, and those bonds were heavy. And Ciena Corp.’s convertibles were trading down on an outright basis after the Hanover, Md.-based telecom-equipment maker reported quarterly results beat estimates but guided below consensus for its current quarter and full-year outlook.

Ciena’s 0.875% convertibles due 2017 fell nearly a point to 98.5, according to Trace data. The Ciena 3.75% convertibles due 2018 traded down 13.25 points to 123, and the Ciena 4% convrtibles due 2020 traded at 129. Ciena shares were down 15% in the early going.

Ciena reported a fiscal fourth-quarter loss of $13.8 million, or 10 cents per share, compared to a loss of $30.7 million, or 29 cents, for the year-earlier quarter. Excluding items, the earnings were 42 cents per share, which beat estimates. Revenue was $692 million for its latest quarter ending in October, which beat estimates.

But for the current quarter the company sees revenue in a range of $555 million to $590 million, which was lower than the $636 million that analysts had been expecting. For the full year, the company sees revenue of $2.64 billion to $2.67 billion, which was below consensus for $2.77 billion.

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