Trading tapers before holiday; Gilead Sciences steady on hedge; Royal Gold better to buy

By Rebecca Melvin

New York, Dec. 23 – Convertibles were quiet Tuesday as the countdown to the Christmas holiday began to be measured in terms of hours instead of days.

“People are probably getting their last trades off as we speak, and by 12 today, they will be done,” a New York-based trader said early in the session.

There was a better feel to the market Tuesday, the trader said. But “with credit widening and still caution with energy, no one wants to take any risk with credit or things on the cusp,” the trader said.

Gilead Sciences Inc.’s convertibles continued to trade down with their underlying shares on an outright basis, but were steady on a hedged basis. The move extends a sharp drop on Monday after news that pharmacy benefits manager Express Scripts Holding Co. has chosen AbbVie Inc. to be its sole provider of hepatitis C treatment, based on cost benefits, and replacing hepatitis C treatments from the Foster City, Calif.-based biopharmaceutical giant.

Elsewhere, Royal Gold Inc.’s convertibles were mentioned as better to buy on a dip in gold prices.

The Royal Gold 2.875% convertibles were seen at 102.5 bid, 103 offered. Shares were up $1.99, or 3%, to $62.90 in the early going Tuesday.

Wesco International Inc.’s 6% convertibles due 2029 were quoted “reasonably higher” at 275, with shares of the Pittsburgh-based supplier of electrical and industrial supplies up to $77.92, or nearly 1%, on the day.

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