Iconix jumps on financing to repay 2.5% convertibles; energy, commodities bouncing back

By Rebecca Melvin

New York, March 7 – Iconix Brand Group Inc.’s two convertible bond issues jumped on Monday after the New York-based brand management company announced it has obtained financing to repay the 2.5% convertibles that are due June 1.

Iconix entered into a new five-year $300 million senior secured term loan credit facility provided by credit funds managed by affiliates of Fortress Investment Group LLC. The loan must be used to repay the convertibles.

Iconix was the name of the day and a good trade for the convertibles market, market sources said.

“ICON is just about the only name trading today,” a New York-based trader said.

But the continued updraft in oil and other commodities markets could not be ignored, and several convertible energy names tacked on another 2 points to 3 points, which has been the trend in place for the last week.

There was no single factor pinpointing why commodities, including a record rise in iron ore on Monday, are moving up so single-mindedly. One source chalked it up to momentum and the fact that the sector was deeply oversold.

Chesapeake Energy Corp. and Whiting Petroleum Corp. were up again, with the Chesapeake 2.5% convertibles due 2037 seen up another 2.5 points on the day to 59 bid, 59.25 offered on Monday.

That issue was around 55 on Friday and around 53 on Thursday.

Whiting’s 1.25% convertibles were up another almost 3 points to 51 bid, 53 offered versus a $7.09 stock price.

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