Morning Commentary: Convertible bond market quiet at open; SunEdison’s 5% convertible stands at 56

By Rebecca Melvin

New York, March 2 – U.S. convertibles seemed to be in pause mode early Wednesday with little follow through on issues that were active on Tuesday and as the primary convertibles market remained quiet.

Market players are “mostly sitting around hoping that stuff that went south will come back,” a New York-based trader said.

The biggest impact is that many market players were significantly hurt by the downturn, and they have not yet regrouped, the trader said.

Meanwhile stocks that had a big rally to start off the month on Tuesday were also toggling the flat line, and oil prices and Treasury yields wavered as well.

Exelixis Inc.’s convertibles were quiet after jumping in trade on Tuesday after the South San Francisco, Calif.-based biotechnology company signed an exclusive licensing agreement to commercialize and develop cancer therapy Cabozantinib in regions outside the United States, Canada and Japan.

SunEdison Inc.’s issues were seeing little action as the underlying shares came back a little but still reflect a company in dire straits. SunEdison’s newer 5% convertibles due 2018 traded last at 56, which was off 5 points.

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