Morning Commentary: Convertibles mostly positive in light volume; Proofpoint expands on swap

By Rebecca Melvin

New York, April 22 – U.S. convertibles were trading lightly on thin volume early Friday amid a crop of mixed earnings reports, but convertibles paper was mostly better and definitely better on the week, market sources said.

Proofpoint Inc. traded up on swap by 0.625 point, a New York-based trader said. “That company, a small company, is starting to break through,” he said.

The Proofpoint 1.25% convertibles were last at 151.75 versus an underlying share price of $55.81, the trader said.

Proofpoint shares were up $1.41, or 2.6%, to $55.10 last on the Nasdaq stock exchange.

Also trading up was Southwestern Energy Co. That paper was up 15 to 20 cents after quarterly earnings beat expectations, a trader said.

“It also had kind of higher revenue and looks like the forward curve on gas pricing is favorable for them,” the trader added.

Southwestern Energy’s mandatory convertible preferred shares due 2018 traded up $2.62, or 10.5%, to $28.43. Southwest shares were up $1.20, or 11%, at $11.85 in active trade.

The shares of a few other convertibles issuers that reported earnings were a little higher even though they missed estimates, including Crown Castle International Corp. and Trinity Industries Inc. But Unisys Corp. shares were up about 5.6% after it reported a loss for the quarter that was better than expected.

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