Morning Commentary: Vipshop traces outright gains; Sina holding in; market follows weaker shares

By Rebecca Melvin

New York, Aug. 17 – U.S. convertibles trading action on Wednesday followed equities, which were fractionally lower again after the three major U.S indices notched record highs on Monday.

Vipshop Holdings Ltd.’s 1.5% convertibles were the most actively traded issue, according to Trace data. But on Wednesday, the paper was trading lower in tandem with the underlying American Depositary Shares of the China internet company. But the bonds were essentially unchanged on a dollar-neutral, or swap, basis, compared to Tuesday when the ADS spiked higher following better-than-expected quarterly earnings.

The Vipshop bonds changed hands at 107.9 compared to 108.5 to 109.5 on Tuesday. Vipshop ADS were $16.04.

Also in the China-internet space, Sina Corp. made an appearance in U.S. convertibles trade, with the Sina 1% convertibles due 2018 trading at 99.3, which was lower by less than 0.125 point, but holding up better than the underlying ADS of the Shanghai-based social media company. Those were down 3% at $69.60. The Sina bonds had traded in the low 90s in early July.

Elsewhere, newer issues continued to trade. DISH Network Corp.’s 3.375% convertibles were off with the generally dour market tone, trading at 106.27, or down 0.75 point. DISH shares were down 85 cents, or 1.6%, at $51.31.

Two Tesla Motors Inc. convertibles were in trade, but weighed down slightly by the underlying common shares of the California-based electric car maker, which have moved lower all this week.

The Tesla 1.25% convertibles due 2021 traded at 87.75, and the Tesla 0.25% convertibles due 2019 traded at 91.875.

Meanwhile, two convertibles of WebMD Health Corp. traded as the common shares of WebMD that underlie the bonds dropped 29 cents, or 0.6%, to $51.50.

WebMD’s 1.5% convertibles due 2020 traded at 117.89, or down 0.5 point, and WebMD’s 2.5% convertibles due 2018 traded at 105.1, which was off 0.1 point.

There was no further information available yet on the Liberty Interactive LLC debentures exchangeable for Charter Communications Inc. common stock that that company said late Tuesday it is planning to sell.

The proceeds are to repay up to $450 million outstanding under a margin loan facility, to repurchase its 0.75% exchangeable senior debentures due 2043, and to satisfy its exchange obligation in cash for holders that tender the 2043 debentures.

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