DISH Network most active in convertibles market; Cobalt on the radar as bonds spread out

By Stephanie N. Rotondo

Seattle, Aug. 4 – DISH Network Corp.’s new $2.5 billion of 3.375% convertible notes due 2026 continued to dominate trading in the convertible bond market on Thursday.

The issue priced Wednesday, coming upsized from $2 billion and with an initial conversion premium of 32.5%.

Initial price talk was 3.125% to 3.625%, a market source reported. The initial conversion premium was expected to be 30% to 35%.

In early trades, the paper was seen at 104.375.

“All the trades are right around there,” a trader said.

The paper neared 105.5 at the day’s highs, according to another market source.

Though the equity underlying the debt was initially lower as the session began, it eventually traded back into positive territory.

The equity rose 47 cents to $51.79. The stock was off 42 cents at $50.90 in early trades.

Meanwhile, Cobalt International Energy Inc. also continued to be on the active side.

However, a trader noted that the 2.625% convertible notes due 2019 were holding at levels seen on Wednesday, placing the issue at 38.5.

“That’s exactly where they were yesterday,” the trader said. “They are trading up a storm at that same price today.”

He did note that the 3.125% convertible notes due 2024 “might have come in a little bit,” trading in a range of 32.125 to 32.5.

“It’s surprising that they spread out that much,” he commented.

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