Dycom lower outright, adds on swap; Clovis eyed for potential drug approval; REITs for sale

By Rebecca Melvin

New York, Aug. 24 – Dycom Industries Inc.’s convertibles were down on an outright basis, but they expanded on a dollar-neutral, or swap, basis on Wednesday after the Palm Beach Gardens, Fla.-based provider of specialty contracting services reported positive quarterly earnings but a disappointing outlook.

On Tuesday, the installer of fiber optic lines said that its organic contract revenue growth was 20% for the quarter, but looking ahead, its recent Goodman Networks acquisition was expected to produce lower revenue in fiscal 2017 than initially anticipated.

Depending on delta, the Dycom bonds looked to have expanded about 0.25 point to 1 point on swap, sources said.

Overall, the convertibles market was seen as mixed on the day.

Clovis Oncology Inc. was in focus as shares of the Boulder, Colo.-based biotechnology company rose another 5% early Wednesday amid speculation that its ovarian cancer therapy rucaparib has a chance for regulatory approval after the company said that its drug candidate was granted priority review status.

But the Clovis stock faded to a close that was down nearly 3% and the convertibles were lackluster. After not really trading, there was a print at 83.56, which was down from closer to 85 on Tuesday.

Meanwhile, there was some outright selling of real estate investment trusts such as Extra Space Storage Inc. and no corresponding action by hedged players. The REIT sector has done well of late and some players were taking profits, a market source said.

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