Convertibles trading muted to end quarter; Carbonite firm; Cobalt paper gains; DISH up

By Stephanie N. Rotondo

Seattle, March 31 – Liquidity was subdued in the convertible bond market on Friday, according to market sources.

“It’s pitiful,” one source remarked.

For instance, Carbonite Inc.’s new $125 million issue of 2.5% convertible notes due 2022 – a deal priced early Thursday – barely had any volume, a trader said, though it dominated the space on Thursday.

Still, the trader noted that the paper continued to move higher, trading with a 105 handle.

The underlying stock was also better, rising 90 cents, or 4.64%, to $20.30.

The deal came in the middle of price talk. Barclays ran the books.

Cobalt International Energy Inc.’s convertibles also continued to head into higher territory, a trend for the week, as oil prices broke through the $50 threshold. However, the company’s stock slipped a bit, after seeing double-digit growth in the last couple of sessions.

Meanwhile, DISH Network Corp.’s convertibles were somewhat busy, considering the overall lack of activity, a trader said.

The 2.375% convertible notes due 2024 ticked up half a point by the end of business, closing with a 102 handle. The 3.375% convertible notes due 2026 picked up 1 to 2 points, ending at 121.125.

DISH’s equity was also faring better, gaining 29 cents to $63.49.

Another notable was Microchip Technology Inc., as its 1.625% convertible notes due 2025 and 2027 were slightly active, but overall unchanged from levels seen Thursday.

The 2025 paper was pegged at 143.75, while the 2027 maturity was seen at 101.75.

The stock was under pressure, dropping a dime to $73.78.

However, there was no fresh news out on either DISH or Microchip to act as a catalyst.

Cobalt trades up

Cobalt International’s convertible bonds firmed up again on Friday, even as its equity gave back some of the gains incurred in the previous couple of sessions.

One market source said the 3.125% convertible notes due 2024 were 4 points higher at 24. The 2.625% convertible notes due 2019 were called 4.5 points better at 32.5.

As for the stock, it was off 3 cents, or nearly 5%, at 53 cents.

Cobalt’s securities have been rising recently, as oil prices have headed into higher territory. However, the company said in mid-March that it was considering selling itself, as lower crude prices have weighed on its bottom line.

There has been no word on how its strategic review process is going.

Mentioned in this article:

Carbonite Inc. Nasdaq: CARB

Cobalt International Energy Inc. NYSE: CIE

DISH Network Corp. Nasdaq: DISH

Microchip Technology Inc. Nasdaq: MCHP

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