Tesla Motors up in active trade; Chesapeake mostly quiet with shares down; primary stays hushed

By Rebecca Melvin

New York, March 19 – Tesla Motors Inc.’s B convertibles, or the 1.25% convertibles due 2021, traded actively Thursday, slipping back on an outright basis in tandem with a midday reversal in the underlying shares, but still eking out a dollar-neutral, or hedged, gain, a trader said.

Tesla’s other convertible bonds also traded Thursday, but the B tranche was the most active, although all of the bonds quieted in afternoon trading when shares turned lower following a conference call regarding technology developments and car battery life.

The Tesla paper will probably open weaker on Friday, a New York-based trader predicted.

Meanwhile the energy sector was weaker on Thursday as oil prices resumed their downward trajectory following a bump up with the broader markets late Wednesday in response to the Federal Reserve’s latest monetary policy update.

West Texas Intermediate crude oil for April delivery fell $1.04, or 2.2%, to $45.61.

But energy convertibles were mostly quiet. Chesapeake Energy Corp.’s convertibles saw little action even as the company’s stock fell after Sterne Agee downgraded the Oklahoma City-based energy company to underperform and lowered the share price target to $9, citing what it called questionable capital allocation and a free cash flow deficit.

Chesapeake’s 2.5% convertibles due 2037 traded at 95.5 after having gone out Wednesday at 96, according to Trace data. The Chesapeake 2.25% convertibles due 2038 were not seen to have traded and were last around 91.

Chesapeake’s shares fell 63 cents, or 4.5%, to $13.50.

© 2015 Prospect News.
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