Energy names weak; Whiting Petroleum notes drop below 70; trading light but Qihoo active

By Rebecca Melvin

New York, Dec. 18 – Convertibles players on Friday were watching energy names, which were weaker in light volume, as concerns about low oil prices and global oversupply dragged equity markets lower.

“Not much is trading, but energy continues to be weak,” a Connecticut-based trader said.

An exception to the generally quiet market was Qihoo 360 Technology Co. Ltd. The Qihoo convertibles were active after the company said in a regulatory filing that holders can put the bonds at par plus accrued interest if the company goes private, as planned.

The China PC and mobile internet security company entered into a definitive merger agreement in June to be acquired by a consortium of investors for $9.3 billion in cash, including the redemption of debt.

The Qihoo 0.5% convertibles due 2020 were better by a point or more, trading at 96.8.

The Qihoo 2.5% convertibles due 2018 were little changed at 98.375, and the Qihoo 1.75% convertibles were not heard in trade.

Back in energy names, Whiting Petroleum Corp.’s convertibles traded down to 68.5 to 69 in early trade after an early 70 print, the trader said. And at the end of the session the Whiting convertibles were indicated down to 66.6, according to a market source.

For the year so far, U.S. convertibles have lost 2.1%, compared to a 6.2% loss for the equities underlying the convertible paper, Barclays said in a note published on Friday.

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