New WPX mandatory slips with lower shares; energy sector weakens further; Jarden expands

By Rebecca Melvin

New York, July 17 – WPX Energy Inc.’s newly priced 6.25% mandatory convertibles edged up initially, but then moved lower on Friday after the Tulsa, Okla.-based energy exploration and production company priced an upsized $350 million of the preferred shares at the midpoint of price talk.

The WPX mandatories traded up to $50.50 to $50.75 from their $50.00 par and then fell to $49.00 when the common stock sold off, a New York-based trader said.

Back in established issues, the energy sector continued to weaken. Oil, gas and coal names across the board were down 1 or 2 points for the week, the trader said.

He attributed weakness to “a confluence of events” that have resulted in global oversupply and lower demand, with the Iran nuclear deal signed Tuesday adding to the existing sentiment.

The Iran deal signed by the United States, the United Kingdom, Russia, China, Germany, France and Iran includes lifting economic sanctions against the Islamic nation that will allow it to sell its oil output freely in global markets. Goldman Sachs has estimated that Iran could supply an extra 200,000 to 400,000 barrels of oil per day in 2016.

Elsewhere, Jarden Corp.'s 1.5% convertibles expanded by about 0.375 point after the Rye, N.Y.-based consumer products company priced an upsized 16 million shares of common stock at $54.50 each, another New York-based trader said.

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