Convertibles firmer on thin volume ahead of Christmas; energy improves; equities positive

By Rebecca Melvin

New York, Dec. 23 – U.S. convertibles were firmer on thin volume on Wednesday as a 4% gain in crude oil prices supported equities, a New York-based trader said.

Energy convertibles have been butchered in the past month along with their underlying shares as oversupply fears depressed oil and other energy prices.

Cobalt International Energy Inc., which has been a focus of selling in the last couple of sessions, saw its 2.625% convertibles due 2019 trade up to 58.5 on Wednesday from 57 on Tuesday.

Shares of the Houston-based oil and gas exploration and production company were up 34 cents, or 6%, at $5.80.

Whiting Petroleum Corp.’s 1.75% convertibles were indicated up at 69.69 from 66.27, according to a market source. Whiting shares surged $1.65, or 18%, to $10.65.

West Texas Intermediate crude oil for February delivery gained $1.36, or 4%, to $37.50 on the New York Mercantile Exchange on Wednesday, boosted by government data that showed an unexpectedly large decline in U.S. stockpiles.

Chesapeake Energy Corp.’s 2.5% convertibles due 2037, which have a call in May 2017, traded on Wednesday at 42.5, which was up 0.25 point from Tuesday, but still down by more than half from 86.5 on Nov. 9, according to Trace data.

Shares of the Oklahoma City-based oil and natural gas company gained 42 cents, or 11%, to $4.40.

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