Convertibles activity quiet; Tesla firm; Yahoo! convertibles weaken; Chesapeake Energy bid

By Rebecca Melvin

New York, Aug. 14 – U.S. convertibles traded quietly on Friday as equities wavered, closing up at their session highs but lower for the week, market sources said.

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

Trading volume is generally light in the middle of August, and new issuance essentially dries up with many market players away for vacation. But there is an expectation that convertibles action will pick up markedly after the Labor Day holiday, which is still three weeks away.

Of names that were seen in trade on Friday, 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 share issue was upsized on Friday to about $650 million in size 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.

This past week, Chesapeake Energy Corp. was said to have been a feature of trade as was Micron Technology Inc.

“There were buyers of Chesapeake across the capital structure,” a New York-based trader said.

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