Allergan mandatory edges higher on news of deal talks; Peabody sinks to new lows; NXP, Rovi shares drop

By Rebecca Melvin

New York, Oct. 29 – U.S. convertibles players were watching different situations on a big earnings day for the market on Thursday as well as a deal on tap post-close from Integrated Device Technology Inc. and uncertainty stirred by a potential tie up between Allergan plc and Pfizer Inc., a New York-based trader said.

A lot of focus was on the Allergan mandatories, which were up about 0.375 point on a swap basis at 104.5 versus an underlying share price of $310.00, a trader said.

Elsewhere, Peabody Energy Corp.’s convertibles traded down to a new low as the company’s shares fell further following weak earnings posted earlier this week by the St. Louis-based coal company.

“There is the possible question of how much time do they have left before they have to restructure at some point,” a Connecticut-based trader said regarding the distressed company.

Meanwhile, NXP Semiconductors NV reported earnings that took its shares down 20% and Rovi Corp. shares plunged 20% after the Santa Clara, calif.-based software and internet media company reported a quarterly loss of $18.5 million.

Bunge Ltd. was also a miss on earnings expectations, a New York-based trader said.

The Bunge convertibles preferreds were down on swap amid instability of the setup of the structure even though Bunge’s shares didn’t really move, the trader said.

The Bunge preferreds were seen around 19 when the shares were slightly lower. The stock ended lower by 6% at $74.09.

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