Morning Commentary: New Frontier Communications edges up on swap; Anadarko prices upsized deal

By Rebecca Melvin

New York, June 5 – Frontier Communications Corp.’s new 11.125% mandatory convertibles traded up from their 100 par on Friday after the Stamford, Conn.-based wireline telecommunications provider priced $1.75 billion of the preferred shares at the rich end of talked terms.

The Frontier mandatories were quoted at 101 with the underlying shares up about 1.8% at $5.08.

The new paper expanded about 0.25 point to 0.375 point on swap, and there was a lot of activity in it, a New York-based trader said.

Also among new deals, Anadarko Petroleum Corp. priced an upsized $400 million of tangible equity units exchangeable into units of Western Gas Equity Partners LP at terms that were mixed compared to talk.

Shares of Western Gas were off fractionally in the early going but were last up at $58.42. The mandatories were not yet heard in trade.

Elsewhere, convertible paper was seen weaker with moving interest rates. Both SanDisk Corp. convertibles were down a little, with the SanDisk 0.5% convertibles due 2020 down 0.25 point on swap, a New York-based trader said.

SanDisk shares were rising however, up $1.58, or 2.4%, last at $68.68.

Equities were narrowly mixed after a positive U.S. payrolls report rekindled worries about the greater potential for an earlier Fed rate hike later this year.

May nonfarm payrolls showed an increase of 280,000 workers, which was better than expected. April’s tally was revised down to 221,000 workers added to payrolls, from 223,000. The unemployment rate ticked up to 5.5% from 5.4% as more people entered the workforce.

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