Anthem deal looks cheap; New Source prices $44 million preferreds; Whiting Petroleum flat

By Rebecca Melvin

New York, May 6 – U.S. convertibles were generally quiet on Wednesday as traders sized up a planned $900 million offering of mandatory convertibles that Anthem Inc. was expected to price after the market close and as equities continued to pull back in the broader markets.

The planned Anthem convertibles looked very cheap, sources said, but allocations were expected to be linked to redemption of existing paper that is being bought back with proceeds of the new deal, and therefore enthusiasm for the deal was somewhat tempered.

Anthem’s existing’s 2.75% convertible bonds due 2042, of which a portion will be repurchased with proceeds of the new deal, remained active in trade after trading actively on Tuesday, and they were steady at around 208 with the stock at about $154.50.

Also in the primary market, New Source Energy Partners LP priced $44 million of 11% convertible preferred units in a registered deal sold via Stifel, Nicolaus & Co. Inc. and Robert W. Baird & Co.

The new units were not heard in trade. New Source shares traded up in the early going but fell back into negative territory and ended down a nickel, or 0.9%.

“It was pretty quiet,” a New York-based trader said about the convertibles session.

Whiting Petroleum Corp.’s convertibles traded in line with their underlying shares as oil prices pulled back from an intraday high that represented a new peak for 2015.

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