Ctrip.com drops dollar neutral; Alpha Natural mixed; traders unaffected by NYSE shutdown

By Rebecca Melvin

New York, July 8 – U.S. convertibles were weaker again on Wednesday as a slide in China-related names continued for a third straight day amid worries about China’s tumbling stock markets.

A shutdown of the New York Stock Exchange for about 3.5 hours due to a technical glitch was a nonissue for convertibles players, market sources said.

The China’s Shanghai Composite index tumbled nearly 6% to 3,507.19 on Wednesday, notching a three-month low despite another round of government measures to support the markets.

Among those measures, the China Financial Futures Exchange raised margin requirements for shorting contracts on small-cap CSI 500 index and state-owned firms were ordered not to cut holdings in their listed companies.

In the United States, market players were selling Ctrip.com International Ltd.’s newer C and D convertibles, and those bonds were lower on a dollar-neutral basis. The Ctrip Cs were down by about 0.75 point, a New York-based sellsider said.

Also among China issues, Sina Corp. and YY Inc. were lower for a third straight day.

Elsewhere, energy issues were fairly quiet in the secondary market. But Alpha Natural Resources Inc.’s convertibles, which mature Aug. 1, jumped to 45 from the mid 30s amid optimism that the issue will be paid, a New York-based analyst said.

Spurring the Alpha Natural issue was news that the company has borrowed $445 million from its credit facility, the analyst said.

But Alpha Natural’s longer-dated convertible bonds were lower.

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