Midday Commentary: L-3 Communications active on anticipated call; DealerTrack swoons after earnings

By Rebecca Melvin

New York, May 13 - An avalanche of L-3 Communications Holdings, Inc.'s 3% convertibles due 2035 changed hands early Tuesday as market players weighed a potential call of the bonds by the New York-based aerospace and security contractor, sources said.

The L-3 3% convertibles traded mostly between 131.75 bid, 132.25 offered, and it was the top-volume issue of the day so far, according to Trace data, with $16.46 million bonds having traded by 11 a.m. ET.

Dealertrack Technologies Inc.'s convertibles traded down about 11 points outright early Tuesday against a 12% drop in the underlying shares of the Lake Success, N.Y.-based auto retail software service company after it reported earnings that missed estimates.

Dealertrack's 1.5% convertibles due 2017, which is a two-year old, $200 million issue, dropped 11 points outright to 123.1, according to Trace data. Shares fell $5.34, or 12%, to $39.04.

Meanwhile, Fidelity National Financial Inc.'s 4.25% convertibles continued to trade and looked about 0.375 point higher, in line with higher shares at 170.875.

This name showed up amid buying interest on Monday.

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