Convertibles better on improved sentiment; SanDisk 1.5% gains on swap; SunEdison rises

By Rebecca Melvin

New York, Sept. 3 – U.S. convertibles improved early Thursday amid better buyers even as the countdown to the holiday weekend was in full swing, and slowing trading volume was anticipated.

“It’s a lift-a-thon. Sentiment has turned, and everything across the board is better by 0.25 point to 0.5 point,” a New York-based trader said at late morning.

Later, with a fade in the equities rally, convertibles quieted.

A notably improved issue was SanDisk Corp.’s 1.5% convertibles due 2017.

The bonds of the Milpitas, Calif.-based flash memory chip maker moved up to 126.90 to 127.00 in active trade in the early going, which was up from about 124.50 on Wednesday, according to Trace data. Later those bonds were seen to have backed off with lower shares to 125.25 to 125.50.

SunEdison Inc.’s beaten-down convertibles traded up at least on an outright basis as the underlying shares of the renewable power company jumped 11% on comments from chief executive Ahmad Chatila that the company could be cash flow positive as soon as the end of this year. The cash flow will come from renewable energy projects that SunEdison invests in and sells to yield companies.

Earlier estimates on when the company would start making money were late 2016 or early 2017.

Chatila’s comments were made during a Wednesday interview with Bloomberg.

SunEdison’s shares had fallen about 55% last month to $10.00 from around $22.00.

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