Many convertibles, including investment grade, weaker; Twitter to price $1.3 billion deal

By Rebecca Melvin

New York, Sept. 10 – Many convertibles, including investment-grade issues, were notably weaker on Wednesday as market players sold paper deemed to be expensive, while more balanced, moderately priced paper was firm, market players said.

The weakness was part of an ongoing trend in recent weeks, but seemed to be exacerbated by market players trying to lighten up ahead of new, big deals rumored to be launched imminently into the market, a New York-based trader said.

In fact, Twitter Inc. launched after the market close an offering of $1.3 billion of convertible senior notes in two tranches that was expected to price after the market close Thursday.

Intraday, Priceline Group Inc.’s 0.9% convertibles, of which $1 billion priced last month, were seen a little lower at 95.8 in the early going, which was down 0.4 point, according to Trace data. Shares were fluctuating.

AOL Inc.’s 0.75% convertibles, of which about $380 million priced last month, also dragged a little, trading at 101.78. But shares were also lower, so those bonds were flat or expanded on a hedged basis.

Yahoo! Inc.’s 0% convertibles due 2018, another large issue of $1.25 billion, was active in a continuation of Tuesday’s action, and they were down another 0.25 point to 103.875.

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