Telvent rises in quiet debut; JA Solar, solar names active; Massey Energy extends losses

By Rebecca Melvin

New York, April 7 - Telvent GIT SA's newly priced 5.5% convertibles jumped to as high as 106.5 on their debut Wednesday as their underlying shares rose, but the new paper wasn't actively traded, sources said.

"There was a little noise, but no trades posted," a New York-based sellside trader said.

A syndicate source said the new Telvent ended the session at 104.5 versus a share price of $28.62, lower than the high trades of the day and in line with the underlying stock at day's end.

JA Solar Holdings Co. Ltd. convertibles were pulled into trade, but not substantially higher, as their underlying stock surged in heavy volume after the Shanghai-based solar products company revised guidance upward on first-quarter shipments.

The news boosted the solar sector, and SunPower Corp. saw its new SunPower 4.5% convertibles due 2015 trade at nearly 101 compared to 100.5 previously.

Massey Energy Co.'s convertible bonds extended losses Wednesday amid continued fallout related to the coal producer's mine accident that cost the lives of 25 miners Monday afternoon.

King Pharmaceuticals Inc. traded in line with the underlying shares as the Bristol, Tenn.-based maker of generic and branded prescription drugs hangs in the cross hairs of investor interest in light of the changing health care landscape.

Overall trading meandered as equity markets pulled lower late in the session. The Dow Jones Industrial Average fell 72.47 points, or 0.7%, to 10,897.52; the S&P 500 index lost 7 points, or 0.6%, to 1,182.44; and the Nasdaq Stock Market shed 5.7 points, or 0.23%, to 2,431.16.

Europe remains mute

The European convertible market remained quiet on Wednesday amid a disappointing lack of new issues.

Tamweel PJSC's 4.31% convertible sukuk due 2013 was seen trading around 80, up from about 76 a couple of days back, on speculation about a merger with fellow Dubai mortgage bank Amlak.

"European bonds are quite dull," a London-based trader said. "One feature I've seen is people still looking for laggards."

The market has been quiet because of a continued dearth of new deals. The trader had been hoping for a pick-up in the primary market after the Easter break, but the pipeline has yet to reopen.

Convertibles in Europe are rich at the moment, and the market has been "well picked over and people have been hoping for some new issues...but the new deals just don't seem to be coming along," the trader said.

Telvent indicated higher

The closing mark on Telvent's newly priced 5.5% convertibles due 2015 was 104.5 versus a share price of $28.62, according to a syndicate source Wednesday.

"It did fairly well," the source said. The company priced $175 million of five-year convertibles late Tuesday at the cheap end of talk for the coupon and at the midpoint of premium talk.

Shares of the Madrid-based information technology company closed up 72 cents, or 2.6%. It had been as high as $29.66 during the session, which was when the new convertibles were 106 to 106.5.

There was some flipping, sources suggested, but even though the stock ran and it was bid 105 with the stock up a buck, not a whole lot changed hands.

"I heard Telvent this morning but don't know if they actually traded," a New York-based sellsider said.

All in all, it was considered a cheap piece of paper and had a discount because of it being a Spanish company, one source said.

JA Solar, SunPower trade

"Solar was hot," a Connecticut-based sellsider said. But he said the trades were away from him, and in general pricing wasn't significantly higher.

JA Solar's 4.5% convertibles due 2013 traded last at 84.625, which was up only 0.625 point on the day. Meanwhile shares of the Shanghai-based solar company surged 55 cents, or nearly 10%, to $6.22.

SunPower's new 4.5% convertibles due 2015 were seen closing about 0.5 point higher at 100.94, up from 100.44, according to a pricing source.

SunPower's 4.75% convertibles due 2014 traded at 96, which was 0.5 point lower on the day.

Shares of the San Jose, Calif.-based power company were up 38 cents, or 2.6%, at $19.29.

JA Solar said in a news release that based on current customer orders and product deliveries, it now projects first-quarter shipments to exceed 265 MW, above the high end of its previous guidance of 215 MW to 225 MW, which was given on Feb. 11.

"During the first quarter, we saw robust demand from existing and new customers," said Peng Fang, chief executive of JA Solar, in a news release. "By streamlining the company's existing solar cell manufacturing facility, JA Solar is able to achieve higher-than-expected production to meet strong customer orders. We also won several new European customers during the quarter, which further diversified our customer base and provides better visibility for the full year."

The chief executive also said JA Solar was seeing strong demand from Germany, China, United States, Italy, South Korea, Spain, France, the Czech Republic and India; as well as in emerging solar markets, such as Australia, Canada and Japan.

The company expects to report first-quarter results in mid-May and plans to provide guidance for the second quarter of 2010 and updated full-year 2010 guidance at that time.

Massey extends losses

Massey Energy's 3.25% convertibles due 2015 traded down another 2.75 points to 3 points outright on Wednesday, changing hands at 92.75 versus a share price of $45.90, compared to 95.5 versus a share price of $49.40 on Tuesday, according to a New York-based sellside desk analyst.

Shares of the Richmond, Va.-based coal producer fell another $3.23, or 7%, to $45.22 after skidding 11.4% on Tuesday.

Metallurgical coal producer Massey Energy lost 25 miners and four remain missing following a blast at its Upper Big Branch Mine in Whitesville, W.Va., about 30 miles south of Charleston.

Mentioned in this article:

JA Solar Holdings Co. Ltd. Nasdaq: JASO

King Pharmaceuticals Inc. NYSE: KG

Massey Energy Co. NYSE: MEE

SunPower Corp. Nasdaq: SPWRA

Tamweel PJSC Dubai: TAMWEEL

Telvent GIT SA Nasdaq: TLVT

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