Convertibles quiet ahead of Fed news; SunPower lower on swap; Restoration Hardware mixed

By Rebecca Melvin

New York, Dec. 15 – U.S. convertibles traded quietly on Tuesday with only a few company-specific trades in notable action and without the large moves that hit some high-yield names in the past couple of sessions, a New York-based trader said.

“It’s a pretty quiet day as far as the headlines go,” the trader said.

Given that year-end is around the corner and news on rates is expected Wednesday at the conclusion of the Federal Open Market Committee’s policy meeting, “it’s a formula for a quiet day,” he said.

SunPower Corp.’s 4% convertibles, which priced earlier this month, were active and traded up on an outright basis along with higher shares, but lower on a dollar-neutral, or swap, basis after news that the international climate change deal was signed in Paris.

Earlier this month the San Jose, Calif.-based solar company priced an upsized $400 million of the seven-year senior debentures at the cheap end of talked terms.

Restoration Hardware Holdings Inc.’s two 0% convertibles, one due 2019 and the newer one due 2020, traded mixed after the Corte Madera, Calif.-based specialty retailer reported earnings that beat estimates and raised guidance. Shares wavered but were last up nearly 1%.

Restoration’s 2019 convertibles crossed the Trace tape at late morning at 91.562, which was up 1.4 points on an outright basis. The Restoration 2020 bonds traded at 87.9, which was down about 0.7 point, according to Trace.

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