Convertible debt trading subdued as week ends; Advanced Micro Devices firms; yield-plays eyed

By Stephanie N. Rotondo

Seattle, Oct. 14 – Trading in the convertible bond market was muted in Friday trading, though newsworthy names and yield-plays were in focus.

A trader noted that Advanced Micro Devices Inc.’s 2.125% convertible notes due 2026 – a $700 million issue that priced Sept. 8 with a 33% conversion premium – were on the more active side.

The trader placed the issue at 109 versus a stock price of $6.98 at mid-morning. By the bell, the paper had settled in “just shy of 108,” as the equity improved over 4% to $6.75.

The equity was up as much as 7% by mid-morning, as it was announced that the semiconductor manufacturer was partnering with Alibaba Group’s cloud computing unit.

“The partnership between AMD and Alibaba Cloud will bring both of our customers more diversified, cloud-based graphic processing solutions,” said Simon Hu, president of Alibaba Cloud, at the Alibaba Computing Conference on Friday.

Among yield-plays, Spirit Realty Capital Inc.’s 3.75% convertible notes due 2021 were trading somewhat busily, according to a trader.

The trader saw the convertibles at 111.35 against a share price of $12.70.

The equity, for its part, was initially slightly higher day over day, though there was no fresh news out on the real estate investment trust to act as a catalyst. But it eventually came down 10 cents to $12.52.

Blucora Inc., another yield name, was “trading up,” a trader said.

“Lots of demand,” the trader said, seeing the 4.25% convertible notes due 2019 at 96.25.

The stock was off a penny at $11.50.

As for more distressed convertible issues, a trader said Peabody Energy Corp.’s 4.75% convertible junior subordinated debentures due 2066 were pushing higher to a 7.5 to 7.75 context.

“They are continuing the rally with coal prices,” the trader said. “These were below 1.00 a month or so ago.”

The coal producer’s over-the-counter traded equity was 6 cents higher, or 3.64%, at $1.71.

Mentioned in this article:

Advanced Micro Devices Inc. Nasdaq: AMD

Blucora Inc. Nasdaq: BCOR

Peabody Energy Corp. OTCBB: BTUUQ

Spirit Realty Capital Inc. NYSE: SRC

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.