SanDisk up on swap after lowered guidance; Southwestern Energy launches $1.3 billion deal

By Rebecca Melvin

New York, Jan. 12 – SanDisk Corp.’s convertible bonds fell on an outright basis along with a 14% slide in the underlying shares, but they were significantly better on a dollar-neutral, or hedged, basis on Monday after the Milpitas, Calif.-based data storage company lowered revenue guidance for the just-completed quarter.

The two SanDisk bonds were the two most actively traded issues of the day, according to Trace data.

Elsewhere, convertibles were trading quietly as the energy sector led equities lower amid further deterioration in oil prices, and Southwestern Energy Co. launched a $1.3 billion offering of mandatory convertible preferred shares ahead of the market open for pricing Wednesday.

“It was probably a hard sell” to launch the deal from Southwestern Energy, a Houston-based oil and gas exploration and development company, into the market, a New York-based trader said. But further comments on the deal were not forthcoming as market players were not yet focused on the deal, which wasn’t expected to price until Wednesday.

Also in the primary market, Aegean Marine Petroleum Network Inc. launched a $40 million add-on to its 4% convertible bond issue due 2018. The deal, expected to price ahead of the market open on Tuesday, was talked at an offer price of 111 to 113. The new notes will have the same terms as the initial notes, other than the issue date and public offering pricing.

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