Convertibles quiet, steady post Fed; some health-care names better bid; Medicines edges up

By Rebecca Melvin

New York, Sept. 18 – U.S. convertibles were mostly quiet as the common shares underlying many names fluctuated on Friday.

The equities markets overall were selling off with the major indices down more than 1% as investors digested the Federal Reserve’s decision to keep its Federal Funds rate unchanged at near 0%.

Convertibles, which saw an expansion of about 0.25 point early Thursday leading into the announcement, were largely unchanged afterwards, and the same was true early Friday, a New York-based trader said.

“It’s kinda dead, actually,” he said. But the selling in equities was on heavy volume.

In convertibles there was some strength in various health-care names. The trading was company specific, a trader said.

Medicines Co.’s 1.375% convertibles due 2017 were a little stronger with the underlying shares of the Parsippany, N.J.-based health care company down about 1%.

The convertibles of Ariad Pharmaceuticals Inc. and Synergy Pharmaceuticals Inc. were better on swap by 0.25 point to 0.5 point on weaker shares. And Tesaro Inc.’s 3% convertible bonds remained better bid after the shares and convertibles jumped on Thursday.

“They were bid where they were lifted on Thursday,” the trader said of Tesaro.

“Some of the names in the health-care sector are better to buy,” the trader said. Earlier in the week, health care had been quieter. But people are still looking at some specific names and expect M&A to be a catalyst to price movement, he said.

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