Convertibles trading subdued; Nortel, Illumina on the active side; Emerald up on deal news

By Stephanie N. Rotondo

Phoenix, May 26 – Though the convertible bond market was struggling to rev up in post-holiday trading, a trader noted that Nortel Networks Corp. and Illumina Inc. paper was on the busier side.

Nortel debt has seen more action recently after judges in the company’s U.S. and Canadian bankruptcy cases opted to craft a distribution plan of their own in regards to about $7.3 billion in cash.

In Tuesday trades, the 2.125% convertible notes that came due in 2014 were seen in an 85 to 85.25 context.

The 1.75% convertible notes that should have matured in 2012 were pegged in the same ZIP code.

One trader deemed those levels “up about a point.”

Meanwhile, Illumina’s Rule 144A-distributed 0% convertible notes due 2019 and 0.5% convertible notes due 2021 were holding steady around 115 and 121, respectively, according to a trader.

Illumina was referenced in a new report from Morgan Stanley & Co. Inc. that suggested companies that have been the recipients of takeover offers in the last year have underperformed the market, including their own sectors.

Illumina’s stock was off $1.64 at $203.36 at mid-morning but finished 9 cents higher at $205.09.

Emerald Oil Inc. said in a regulatory filing on Tuesday that it had reduced a previously announced public offering of stock to $80 million from $150 million.

In Tuesday trading, the convertible notes traded up to a 63.875 to 64 context.

The stock meantime fell $1.58, or 23.27%, to $5.21.

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