Selling hits convertibles: new Illuminas slip on hedge; new SunPower, Trina better bid; new Laclede adds

By Rebecca Melvin

New York, June 6 – U.S. convertible saw $1.675 billion of new paper in the market on Friday, which turned some portfolio managers into sellers as the new product was absorbed.

“What we saw was selling to make room for the new paper. It was one off, pretty indiscriminate, but things were generally for sale, including a lot of tech stuff,” a New York-based trade said.

Illumina Inc.’s newly priced A and B tranches put in a fairly lackluster debut after the San Diego-based developer of genetic research tools priced an upsized $1 billion of the new paper at the rich end of talked terms.

The two Illumina issues were seen trading around par for much of the session, according to one market source. A second source said that there was more pressure on the B tranche, which has a 0.5% coupon and a longer maturity.

SunPower Corp.’s new $400 million of 0.875% convertible senior debentures were seen at 102 bid with the company’s shares down about 1%, and the new Trina Solar Ltd. deal, bearing a 3.5% coupon, was at 103 bid with the shares little changed.

Meanwhile, the Laclede Group Inc.’s new 6.75% mandatory convertibles traded up along with the underlying shares after the St. Louis-based utility priced $125 million of the units at the tight end and beyond the tight end of talk.

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