Morning Commentary: Western Digital convertibles drop on earnings; Copa below par

By Abigail W. Adams

Portland, Me., May 1 – It was a relatively quiet morning in the convertibles secondary space on Friday as equities opened the day in the red on dreary earnings forecasts and renewed trade tensions with China.

The flurry of trading activity surrounding new deals tempered with earnings pushing some outstanding issues into focus.

Western Digital Corp.’s 1.5% convertible notes due 2024 saw high-volume activity with the notes trading off as equity plummeted following an earnings miss.

The 1.5% notes dropped more than 2 points outright to 89.875.

The bonds saw more than $9 million in reported volume about one hour into the session.

Western Digital stock traded down to $39.75, a decrease of 13.75%, shortly before 11 a.m. ET.

Western Digital was selling off following a large third-quarter earnings miss.

The hard disk drive manufacturer and data storage company reported earnings per share of 85 cents versus analyst expectations for earnings of 92 cents.

The company reported revenue of $4.18 billion versus analyst expectations for $4.2 billion.

Meanwhile, while the majority of deals to price over the past week outperformed, Copa Holdings SA’s 4.5% convertible notes due 2025 continued to struggle.

The 4.5% convertible notes dropped below par as stock sold off.

The notes traded as low as 97.75 early in the session.

Copa stock traded down to $41.12, a decrease of 6.99%, shortly before 11 a.m. ET.

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