Twitter debt weakens as S&P cuts to junk; SunEdison softens; Yahoo! gives up early gains

By Stephanie N. Rotondo

Phoenix, Nov. 13 – Recent issuer-specific news was driving activity in the convertible bond market in Thursday trading.

According to one trader, Twitter Inc., SunEdison Inc. and Yahoo! Inc. were dominating trading in the space. Each of those names had fresh news out on Wednesday.

For Twitter, the company held its first analysts day on Wednesday. During the conference, the company gave more details on how it plans to grow its business, and investors initially seemed pleased with the scheme. But then Standard & Poor’s cut the company’s debt to junk status and the gains disappeared.

The 0.25% convertible notes due 2019 traded as high as 92 early in the day, up slightly from Wednesday levels. But they ended at 89.75 bid, 90.75 offered.

The 1% convertible notes due 2021 were also a touch weaker at 89.75.

SunEdison meantime announced on Wednesday that it had found a partner in the Philippines to build solar power plants. But investors didn’t seem overly pleased with the deal, likely on concerns about the company’s higher-than-average debt leverage.

In Yahoo! paper, the convertible notes were up slightly in early trading, but finished the day unchanged. The moves came as two of the company’s top investors reportedly sought to encourage a merger between Yahoo! and AOL. AOL management is said to be receptive to the idea.

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