Newmont convertible notes rise on dividend news; Whiting paper declines after downgrade

By Stephanie N. Rotondo

Seattle, Feb. 12 – Newmont Mining Corp. was trading actively in the convertible bond market on Friday following the company’s announcement of a dividend payment on its common stock.

However, one trader opined that perhaps the 1.625% convertible notes due July 2017 were not accurately priced.

“It makes no sense,” the trader said, seeing the issue trade with a 101 handle, which he deemed a premium of over 100%. “It’s trading 0.3% to maturity, up 76%. That makes no sense.”

The trader added that there “has to be some underlying dynamic” that is keeping the bonds lifted – though he further commented that it was not the “spectacular” terms of the securities.

Newmont’s stock was up 74 cents, or 2.96%, at $25.78.

Newmont will pay 2.5 cents per share to holders on March 24.

Also busy were Whiting Petroleum Corp.’s 1.25% convertible notes due 2020, though that action was to the downside.

A trader said the paper traded at 30 early in the session, which compared to levels around 40 as of Thursday’s close.

However, the paper improved intraday, ending in a 34.25 to 34.5 context.

The stock was meantime initially trading down to $4.40 from $4.90, according to the trader. But even that pared some of its losses, ending off 41 cents, or 8.35%, at $4.50.

Whiting was downgraded by Moody’s Investors Service on Thursday to Caa1 from Ba2.

© 2015 Prospect News.
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