Convertibles quiet to start holiday-shortened week; Whiting drops another point on swap

By Rebecca Melvin

New York, Dec. 21 – Energy convertible names were lower again on Monday amid a mostly quiet session to start the holiday-shortened week before Christmas.

Whiting Petroleum Corp.’s convertibles were weaker as the energy market continues to reel under the oversupply problem. The Whiting bonds were quoted down to 66.25 versus an underlying share price of $9.09. That was down from 68.5 to 69 in early action on Friday and a trade at 66.6 at the end of Friday.

Whiting shares fell another 78 cents, or 9%, to $8.31 on Monday.

Monday’s action represented a continuation of an ongoing trend in Whiting. The most pronounced move lower was on Thursday and Friday, while on Monday the name, which was quoted lower by 1 point to 1.5 points on swap, was “only marginally lower,” a New York-based trader said.

The Whiting bonds have lost about 7 points on swap in the last week and have lost 13 or 14 point in the last two weeks, the trader said.

All energy convertible names were lower as oil prices continued to drop. West Texas Intermediate crude oil for February delivery ended the session at $34.66 per barrel, which was down 0.2%.

“Every day oil is down and the bonds are just dropping along with it,” the trader said.

Cobalt International Energy Inc. was another name on the chopping block, with the Cobalt 2.625% convertibles changing hands at 56 bid, 57 offered.

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