Morning Commentary: Convertible bonds rally in midweek trades; SunEdison remains under pressure

By Stephanie N. Rotondo

Phoenix, Sept. 30 – The convertible bond market was looking to rebound going into month-end trading after spending the beginning of the week on a slide.

“Everything is up today,” a trader said. “Everything is green – marginally. Nothing looks like it’s motoring [up].”

The trader added that while the tone was positive, volume was muted.

SunEdison Inc. paper remained active, however. A trader said the 0.25% convertible notes due 2020 – a Rule 144A deal – was trading in a range of 57 to 58.25, which compared to 58.5 to 60 on Tuesday.

“I’m looking at the trades; they are all sales,” the trader said. “People are bailing out.”

While the bonds were weak, the stock underlying the notes (NYSE: SUNE) was up, rising 51 cents, or 7.66%, to $7.17 in early trading.

Meanwhile, Nvidia Corp.’s 1% notes due 2018 were inching up, adding nearly a point to trade north of 131, according to a trader.

That was against a stock (Nasdaq: NVDA) price of $24.46, which was a 3% gain on the day.

The company announced a new cloud-powered gaming service on Wednesday that is hoped to become the Netflix of the streaming gaming world.

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