Evergreen convertibles up on analyst upgrade; United Rentals up; Level 3 lower; Euronet gains

By Evan Weinberger

New York, Dec. 14 - Evergreen Solar Inc. enjoyed a second day of gains Friday following an analyst's upgrade Thursday.

United Rentals Inc. convertibles also had a solid day. Level 3 Communications Inc. convertibles did not.

Two new preferred issues, Washington Mutual Inc. and Hecla Mining Co., moved in opposite directions Friday.

Euronet Worldwide Inc. convertibles had a strong day as the noise subsided surrounding its hostile takeover bid of MoneyGram International Inc.

No new issues came to market Friday, and trading was relatively light, market watchers said. It was "very quiet," one trader said, noting that people were "working on esoteric items that folks are cleaning" off the year-end books.

"It was OK; not super active," was an analyst's lukewarm assessment of the trading day.

Equity markets took another beating Friday. An unexpected rise of 0.8% in the Consumer Price Index - driven by rising gas prices - and the placing of Citigroup's structured investment vehicle debt onto the company's balance sheet helped smack stocks. Citigroup said late Thursday that the SIVs will cost it up to $49 billion.

The Dow Jones Industrial Average tumbled 178.11 points, or 1.32%, to close at 13,339.85.

The Nasdaq screeched to a halt at 2,635.74, a loss of 32.75 points, or 1.23%.

The Standard & Poor's 500 dove 20.46 points, or 1.37%, at 1,467.95.

Evergreen solar extends rally

Marlboro, Mass.-based solar energy equipment maker Evergreen Solar continued its rally for a second day Friday.

The move began Thursday after the company announced big expansion plans that will increase the generating capacity of its solar panels from 15 megawatts per year in 2008 to more than 500 megawatts in 2012.

Those plans led a UBS analyst to upgrade the company to buy. And that's what investors have been doing for the past couple of days.

Evergreen's 4.375% convertible subordinated notes due July 1, 2012 closed Friday at 248.728 versus a closing stock price of $16.61. They closed Thursday at 222.381 versus a stock price of $15.11.

After posting a 12% gain Thursday, Evergreen stock (Nasdaq: ESLR) gained $1.50, or 9.93%, on Friday.

United Rentals up

Greenwich, Conn.-based construction equipment renter United Rentals stock and convertibles rose Friday as the company's lawsuit to force Cerberus Capital Management to complete its buyout headed to court.

United Rentals' 1.875% convertible senior subordinated notes due Oct. 30, 2023 closed Friday at 116.675 versus a closing stock price of $23.55. They closed Thursday at 108.55 versus a stock price of $21.16.

United Rentals stock (NYSE: URI) leaped $2.39, or 11.29%, on the day.

Level 3 down

Broomfield, Colo.-based telecommunications firm Level 3 watched its 3.5% convertible senior notes due June 15, 2012 close Friday at 88.3991 versus a closing stock price of $3.13. They closed Thursday at 90.6465 versus $3.30.

Level 3 stock (Nasdaq: LVLT) tumbled 17 cents, or 5.15%, on the day.

WaMu preferreds not preferred

Seattle-based commercial bank and mortgage lender Washington Mutual launched its $2.5 billion in 7.75% series R non-cumulative perpetual convertible preferred stock to great fanfare earlier in the week.

The preferreds haven't lived up to the hype in investors' eyes so far.

The preferreds, which have a par value of $1,000, closed Friday at $971.16 versus a closing stock price of $15.15. They closed Thursday at $979.85 versus a stock price of $15.59.

WaMu stock (NYSE: WM) continued its downward trend, losing 44 cents, or 2.82%, on the day.

Hecla preferreds a little more so

Coeur d'Alene, Idaho-based precious metals miner Hecla Mining also released a preferred stock offering this week, and though they opened lower Thursday, they rebounded some Friday.

Hecla's 6.5% mandatory convertible preferred stock due Jan. 1, 2011 closed Friday at $97.13 versus a closing stock price of $9.07. They closed Thursday at $96.85 versus a stock price of $9.38.

Hecla's (NYSE: HL) stock didn't have quite as bright a day, losing 31 cents, or 3.30%.

Euronet draws eyes, investors

So maybe that brewing battle between MoneyGram International Inc. and Euronet Worldwide Inc. may turn into much ado about nothing in the end.

On Thursday, Leawood, Kan.-based money transfer processor Euronet presented troubled Minneapolis money transfer agent MoneyGram with a $1.65 billion buyout offer. When MoneyGram, which has somewhere around $280 million in mortgage-related debt hanging over its head, said that it wasn't interested in a takeover, Euronet got nasty.

Euronet sent a Christmas card trashing MoneyGram's management and shareholders and informed them that they would be taking MoneyGram over in a hostile takeover whether they liked it or not.

And then, after all that noise Thursday, there was nothing Friday.

When asked if he had heard anything new about the deal, one trader said, "Just that the bid was rejected."

An analyst was far more dismissive of the move, calling it a publicity stunt. "That's quiet," he said. "People are starting to see that the people making the bid were just doing it for advertising."

The attention certainly hasn't hurt Euronet, even if most market watchers eye their move on MoneyGram skeptically.

Euronet's 3.5% convertible debentures due Oct. 15, 2025 closed Friday at 100.673 versus a closing stock price of $28.86. They closed Thursday at 97.3411 versus a stock price of $28.54.

Euronet's 1.625% convertible senior notes due Dec. 15, 2024 closed Friday at 104.45 versus a stock price of $28.86. They finished Thursday at 100.062 versus a stock price of $28.54.

Euronet stock (Nasdaq: EEFT) gained 32 cents, or 1.12%, on the day.

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