Dynegy finishes ‘in line’; Starwood Waypoint expands; E&P names suffer, Energy XXI drops

By Rebecca Melvin

New York, Oct. 8 – Dynegy Inc.’s newly priced 5.375% mandatory convertible preferreds ended their first trading day Wednesday flat, or in line with the underlying common stock, after the Houston-based electricity producer priced $400 million of the preferreds at the rich end of talked terms.

But Starwood Waypoint Residential Trust’s new 4.5% convertibles rose on both an outright and dollar-neutral, or hedged, basis after the Oakland, Calif.-based mortgage REIT priced $150 million of three-year senior notes at the cheap end of talked terms.

The new Starwood Waypoint ended the session right around 101.5, which was up about 1.25 points on swap, a New York-based trader said.

Elsewhere, the oil and natural gas exploration and production sector weakened on Wednesday with the shares of many names drooping to 52-week lows.

Energy XXI (Bermuda) Ltd.’s 3% convertibles due Dec. 15, 2018 traded down 4.5 points to 5 points amid a 20% slump in the underlying shares, and despite a rally back in the underlying shares, the convertibles weren’t seen to have recovered, a New York-based trader said.

Cobalt International Energy Inc. and Chesapeake Energy Corp. were also notably weak E&P names in convertibles.

Meanwhile, GT Advanced Technologies Inc.’s convertible bonds remained active with both the 2017 and 2020 convertibles settling in the mid-30 range with the underlying shares closing at $1.10.

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