Convertibles quiet before holiday weekend; most issues indicated lower as equities slump

By Rebecca Melvin

New York, Sept. 4 – U.S. convertibles were “all quiet” on Friday, a New York-based sellsider said, with trading personnel thinned ahead of the Labor Day holiday and equities taking a tumble. Financial markets will be closed on Monday.

Early Friday, the Labor Department said that non-farm payrolls rose 173,000 in August and that the unemployment rate fell to 5.1% from 5.3% previously.

The report weighed on stocks as the tally missed some estimates, but it was likely strong enough to support raising rates if the Federal Reserve was leaning in that direction when the Federal Open Market Committee meets in two weeks.

Bank of Richmond Federal Reserve president Jeffrey Lacker said the payrolls number didn’t change the picture for monetary policy.

In the early going Tesla Motors Inc.’s 1.25% convertibles due 2021 printed at 93.3, which was down about 1.3 points on the day, according to Trace data. Shares of the Palo Alto, Calif.-based electric car maker were down 1.3% at $242.43 in light volume. The shares ended the session down 1.5%.

Shares of SunEdison Inc. were up again, however, supporting the beaten-down convertibles, which were pummeled last month. Shares of the renewable power company pared early gains, however, under the weight of steep sell-off in the broader markets. Early on though the SunEdison shares were up another 2%, after jumping 11% on Thursday.

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