Midday Commentary: Convertibles quiet; older Encore up with shares; Salesforce in line with stock

By Rebecca Melvin

New York, March 7 - U.S. convertibles were quiet early Friday as equities wavered between small gains and losses following a better-than-expected February U.S. jobs report and revisions upward in the tallies of jobs added in the previous two months.

"It's pretty quiet," a New York-based sellsider said of the convertibles market.

Encore Capital Group Inc.'s 3% convertibles due 2017 were better by 3 points in the early going to 165.682, according to Trace data, with the underlying shares of the San Diego-based specialty finance company up about 1%.

Salesforce.com's 0.75% convertibles due 2015 changed hands at 290.428 with shares of the San Francisco-based cloud computing company down about 1% at about $62.00. The 0.75% Saleforce paper was down on an outright basis but looked to be holding in on a hedged basis and compared to trades in the issue at 285 versus a share price of $60.97 on Jan. 31.

Ares Capital Corp.'s 5.125% convertibles due 2016 were fairly active and up 0.125 point on an outright basis at 108.375 with the underlying shares of the New York-based business development company vacillating between small gains and losses.

Equities were mixed early Friday.

The U.S. Labor Department reported that U.S. nonfarm payrolls increased by a seasonally adjusted 175,000 in February, which was better than expectations for a rise in payrolls by 152,000.

In addition, the economy added slightly more jobs in recent months than previously believed, with 129,000 jobs added in January which was revised up from 113,000, and 84,000 jobs added in December, which was revised up from 75,000.

The unemployment rate ticked up, however, to 6.7% in February from 6.6% in January.

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