Morning Commentary: Cobalt’s 2.625% convertible extends gains; Twitter edges lower with shares

By Rebecca Melvin

New York, Sept. 26 – U.S. convertibles players were watching the broader markets early Monday as equities slipped and the volatility index jumped.

A name that was extending gains from last week’s action was Cobalt International Energy Inc. The Cobalt 2.625% convertibles due 2019 edged to 50, after having traded up to about 45 last week.

“They have been active,” a New York-based convertibles trader said of the Cobalt 2.625% paper. “They are trading higher again today at 50.375.”

The Cobalt common shares were positive, too, trading up 3 cents, or 2.8%, at $1.09 last on the New York Stock Exchange. Cobalt is a Houston-based oil exploration and production company.

Meanwhile, there was also follow-on activity in Twitter Inc.’s two convertible bond issues, but they were lower in tandem with the common shares of the San Francisco-based social media company.

Twitter’s 0.25% convertibles due 2019 traded off about 0.25 point to $95.4 on Monday from about 96 on Friday.

The Twitter 1% convertibles due 2021 were down 0.7 point to 94.75, according to Trace data.

Twitter’s common stock was down 71 cents, or 3.2%, at $21.90.

Twitter’s securities had surged last week on speculation regarding a possible sale of the company.

In the broader markets, the CBOE volatility index was up 1.68 points, or 14%, to 13.97 last. Equity indices were about 0.5 point lower. The S&P 500 stock index was down about 10 points to 2,154.32.

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