Convertibles flat to higher amid earnings; primary market mute; SunEdison files Chapter 11

By Rebecca Melvin

New York, April 21 – Earnings reports spurred trading action on Thursday in U.S. convertibles, which remained firm to better amid strong bidders. But the primary market was quiet, which has put a damper on market dynamics for the time being, market players said.

“The general theme is more of the same,” a New York-based trader said. “Everything continues to improve valuation wise, though secondary flows remain skewed toward the larger issues.”

That trader estimated that the market overall was up by 0.215 point to 0.25 point on a swap basis on Thursday.

Lam Research Corp. was active with both the 0.5% convertibles due next month and the 1.25% convertibles due 2018 edging down on an outright basis but in line to slightly better on a swap basis as the common shares of the Fremont, Calif.-based semiconductor-equipment maker traded off.

Tesla Motors Inc.’s A and B convertibles were also a little better on swap, as were Anthem Inc. and Cemex SAB de CV’s 3.75% convertibles, which were all slightly better by about 0.125 point to 0.25 point, a trader said.

There was trading in four of the eight convertible bond issues of SunEdison Inc. after the renewable power company said that it has filed for restructuring under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York.

The filing has been widely anticipated.

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