Morning Commentary: Market generally quiet; Shutterfly, Greenbrier up outright after news

By Rebecca Melvin

New York, July 2 – Convertibles traders were busy in an array of issues early Wednesday amid still generally light volume as the holiday-shortened week passed its midpoint.

“We’re far busier than I thought we’d be,” a New York-based trader said, adding that the market “continued to be a bit firmer than it has been.”

Shutterfly Inc.’s 0.25% convertibles due 2018 bumped up on an outright basis after a report that the Redwood City, Calif.-based online photography company is working with an investment bank to find possible buyers for the company.

The Shutterfly bonds rose to about 105 from the 99 context, according to Trace data. But the company’s shares also surged, so it wasn’t clear how the bonds were trading on a dollar-neutral, or hedged, basis. Shutterfly’s stock jumped $6.13 on the session, or 14%, to $49.64.

Greenbrier Cos. Inc.’s longer-dated convertibles traded up 15 points outright as the company’s shares gained on a better-than-expected earnings report from the Lake Oswego, Ore.-based railcar supplier.

Greenbrier 3.5% convertibles due 2018 traded at 183.56 with the stock up about $6.50, or 11%, at $64.20.

Greenbrier beat earnings estimates by 29 cents and also beat on revenue, guiding fourth quarter and full-year earnings forecasts higher.

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