Weatherford expands as oil drops; BioMarin jumps on takeout chatter; older Tesla thrashed

By Rebecca Melvin

New York, July 7 – Light volumes persisted in U.S. convertibles on Thursday, but a couple of important names traded notably better despite a slide in oil prices and pullback in equities throughout the session, market players said.

Weatherford International Ltd. performed well, expanding about 0.75 point on a dollar-neutral basis, as oil prices tumbled more than $2.00, or 5%, to $45.17 per barrel as oversupply fears resurfaced following soft U.S. inventory data.

BioMarin Pharmaceutical Inc.’s convertibles jumped on an outright basis and expanded on swap after a report that Swiss pharmaceutical company Roche is mulling a buyout offer for the San Rafael, Calif.-based pharmaceutical company, which makes a drug for a rare, genetic muscular dystrophy disease.

Last month the BioMarin bonds gained on rumors of buyout interest from Sanofi as a backup if the French drug company’s takeover bid for Medivation failed.

Moving in the opposite direction, Tesla Motors Inc.’s 1.5% convertibles, or the old bonds, were “trading horrible,” a sellsider said.

The Tesla bond was quoted at 2.875 points below parity on Thursday, which was down from about 1 point less than parity last week.

“Borrow is too tough to fund this trade,” the sellsider said.

A second source said, “There are different dynamics pulling [Tesla] in different ways. Given the short interest, it is one of the more difficult names to short, and there has been a lot of news out in the name.”

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