Energy convertibles extend gains; Whiting outperforms on exchanges; Synergy sags on exchange

By Rebecca Melvin

New York, March 18 – Energy sector convertibles were in focus again on Friday and traded mostly better amid improving sentiment, albeit in light volume, market sources said.

Whiting Petroleum Corp.’s 1.25% convertibles due 2020 were a star of the session, settling up about 3 points on swap after jumping as much as 9 points intraday after news that the Denver-based energy exploration and production company has sealed four exchanges of straight debt for convertibles.

Parts of four different bond issues were exchanged for like amounts of convertibles with the same coupons and maturities. Two of the exchanges were for $150 million or more, and those were likely to trade on convertible desks, a New York-based trader said.

Cobalt International Energy Inc.’s two convertible bonds, which have been lagging the recent energy rally, edged up in active trade.

The Helix Energy Solutions Group Inc. 3.25% convertibles due 2032 looked to have added another 3 points in a small trade on Friday for the Houston-based offshore oil services company, a New York-based trader said.

Chesapeake Energy Corp.’s 2.5% convertibles due 2037 added another 2.5 points on Friday to 75, as the surge in that issue showed no sign of abating.

Elsewhere, Synergy Pharmaceuticals Inc.’s 7.5% convertibles due 2019 were indicated down to 115 from about 129 as shares of the New York-based biopharmaceutical company fell 13.5% to $2.94.

The developer of drugs for gastrointestinal diseases entered into privately negotiated exchange agreements to swap common stock for $79.7 million principal amount of the convertibles plus $2.4 million in interest.

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