Goodrich down again as solvency concerns mount; Spansion jumps; planned Quidel looks cheap

By Rebecca Melvin

New York, Dec. 2 – Goodrich Petroleum Corp.’s 5% convertibles due 2032 extended losses Tuesday as shares of the struggling Houston-based oil and gas exploration and development company continued to plunge amid growing expectations that the global oil market may not return to normalcy in the short term, market sources said.

The Goodrich convertibles slipped another point to 1.5 points to 54 following a 10-point slide on Monday. Goodrich shares fell another 16% on top of a 22% plunge on Monday.

“There are solvency issues with GDP and Sanchez, which is not a convert issuer,” a New York-based trader said. “There are going to be some bankruptcies among the weaker drillers and peripheral players, as oil is going to be weak for a while; it’s not going to snap back.”

Elsewhere, Spansion Inc.’s 2% convertibles due 2020 jumped about 30 points to 202 after news that the Sunnyvale, Calif.-based semiconductor device company is merging with fellow memory chip maker Cypress Semiconductor Corp. in a $4 billion all-stock deal.

Market players also eyed Quidel Corp.’s planned $150 million of six-year convertibles ahead of final terms seen being fixed after the market close.

“They should be fine. The deal should price, and they should trade OK,” a New York-based trader said of the notes being priced by the San Diego, Calif.-based maker of diagnostic tests for health care providers.

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