Morning Commentary: Convertibles market quiet; Tesla firm; Yahoo weaker; Micron moves lower

By Rebecca Melvin

New York, Aug. 14 – U.S. convertibles were quiet on Friday.

“It’s very anemic today, with Trace volume at about $66 million, which is concerning,” a New York-based sellsider said.

Volumes in the middle of August are generally light with many market players away for vacation.

Of the names that were seen in trade, Tesla Motors Inc.’s 0.25% convertibles, or the A tranche, remained firm on the heels of the electric carmaker’s stock offering announcement earlier this week. The issue was upsized on Friday to about $650 million from about $500 million.

It’s “traded up about 40 cents in two days,” the sellsider said of the Tesla A convertibles.

Elsewhere, Yahoo! Inc.’s 0% convertibles traded a little weaker and were close to par amid some selling pressure from European investors, the sellsider said.

Oil prices were creeping slightly higher at late morning with the price of West Texas Intermediate crude for October delivery up 31 cents, or 0.7%, to $43.29 per barrel. But the price was down from the beginning of the week, when WTI reached more than $45.00 per barrel.

The common shares of Whiting Petroleum Corp. were extending losses, touching an intraday low of $18.79 before bouncing back somewhat. The Whiting convertibles were not heard in trade on Friday but had been lower in line on Thursday.

Energy XXI (Bermuda) Ltd.’s 3% convertibles were also not seen in trade on Friday but had changed hands on Thursday at 8, which was down from 10 previously, according to Trace data.

The Houston-based energy exploration and production company’s common shares were down about 2% early Friday at $1.68.

This past week, Micron Technology Inc. was a feature of trade. The Micron 3% convertibles due 2043 traded down more than a point on Friday to 90, with shares of the Boise, Idaho-based chipmaker, which has received a buyout offer from China’s Tsinghua Unigroup Ltd., last down 12 cents, or 0.7%, at $17.57.

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