Morning Commentary: Intel’s bonds trade quietly ahead of earnings; Cypress Semiconductor in focus

By Rebecca Melvin

New York, July 20 – Intel Corp.’s two convertible bond issues traded quietly on Wednesday ahead of the Santa Clara, Calif.-based semiconductor giant’s second-quarter earnings report expected after the market close.

The more equity-sensitive Intel 3.25% convertibles due 2039 were more active in the early going than the more-balanced Intel 2.95% convertibles due 2035. The Intel 3.25% bonds traded up to about 172 from around 168 on Tuesday, according to Trace data.

The Intel 2.95% convertibles were generally quiet after being more active on Tuesday. They traded at 132.625, according to Trace data, which was within the generally tight range in which they have been trading for more than a week.

Intel shares were up 27 cents, or 0.8%, at $35.42.

The semiconductor bellwether is expected to report lower adjusted earnings on slightly better revenue. Traders will be watching to see how its PC-related sales are holding in and whether it is continuing to shift its revenue mix to other segments like the internet of things.

Traders will also be eager to hear any update the company has to offer on its layoffs, voluntary buyouts and site consolidations, which were announced when its first-quarter earnings report was released in April. At that time, Intel posted earnings and revenue that were better than expected and announced that it is cutting 12,000 jobs, or 11% of its workforce.

Cypress Semiconductor Corp.’s 4.5% convertibles due 2022, which debuted in the market a month ago, were also reported in trade in the convert space early Wednesday, but a price was not immediately available to Prospect News.

Cypress Semiconductor shares were up 17 cents, or 1.5%, at $11.68. Last Thursday, the Cypress convertible traded actively and higher by about 1.5 points in the 111.50 bid, 112 offered context.

There were no new deals in the new issue market, and traders said the secondary market was very quiet, with nothing to speak of trading.

“There is not much, not much at all,” a New York-based trader said.

© 2015 Prospect News.
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