Morning Commentary: Newmont Mining convertibles remain active; Energy XXI skips payment

By Rebecca Melvin

New York, Feb. 16 – U.S. convertibles opened Tuesday on a quiet note following the long holiday weekend in observance of Presidents Day.

Newmont Mining Corp. remained active following trade in the 1.625% convertible notes on Friday after the Denver-based mining company’s announcement of a dividend payment on its common stock.

The Newmont 1.625% convertible due 2017 was down about 0.5 point to just under 101, according to Trace data. But shares were down about 1.5% at $25.39.

The high-premium bond could be in demand due to its higher-credit quality rating in the face of a general lack of supply of investment-grade paper, one market source said.

Another name getting a look early Tuesday was Energy XXI Ltd. after the Houston-based oil and gas company reported a wider-than-expected quarterly loss and said it will forgo an interest payment on EPL Oil and Gas Inc.’s 8.25% senior notes due 2018 in an effort to preserve liquidity while cutting leverage.

Energy XXI’s 3% convertible notes due 2018 were already trading down around 5 and little influenced by the news, a New York-based trader said.

“There’s no news possible to make them go much lower,” the trader said.

Energy XXI shares were up a bit at $0.49 per share.

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