Booking Holdings, Akamai, Palo Alto convertible notes active as liquidity improves

By Abigail W. Adams

Portland, Me., March 20 – The convertible secondary space ended a painful week on soft footing with volatility continuing to roil equities and credit spreads at their widest since 2009.

After an early morning rebound, indexes reversed course and the Dow Jones industrial average closed Friday down 4.55%, the S&P 500 index down 4.34% and the Nasdaq composite down 3.79%.

The policy response to the coronavirus pandemic did little to assuage investors.

However, liquidity improved in the secondary space with both outright and hedge players acting as buyers and sellers, whereas previously trading activity was dominated by hedge players.

But sellers continued to trade into the bid, a market source said.

“There’s still a lot of panic,” the source said.

Large, liquid, equity-sensitive issues remained the focus of trading activity, sources said.

Booking Holdings Inc.’s convertible notes continued to see heavy volume with some short-covering and outright buyers driving the trading activity, a market source said.

Palo Alto Networks Inc.’s 0.75% convertible notes due 2023 were also major volume movers on Friday with some hedge accounts buying the notes on swap.

Akamai Technologies Inc.’s 0.125% convertible notes due 2025 saw a fresh round of trading activity on Friday as stock gave back much of the gains from the previous session.

Booking Holdings in focus

Booking Holdings’ convertible notes remained major volume movers in the secondary space as they have been for the past few weeks.

There has been some short-covering in the name, a market source said.

Outright buyers were also starting to scoop up the notes at their current depressed prices.

Booking Holdings’ 0.9% convertible notes due 2021 were the most actively traded name in the secondary space with more than $45 million in reported volume.

The notes were changing hands between 99.25 and par during Friday’s session, a market source said.

Booking Holdings’ 0.35% convertible notes due June 15, 2020 continued to change hands around 105.5 on Friday.

Booking Holdings stock was volatile alongside the overall market on Friday with stock, at one point, up about 8%. However, stock closed the day with losses.

Booking Holdings’ stock traded to a high of $1,299.95 and a low of $1,157.41 before closing the day at $1,177.43, a decrease of 1.18%.

Palo Alto active

Palo Alto’s 0.75% convertible notes due 2023 were major volume movers on Friday with some hedge players buying the notes on swap, a market source said.

The 0.75% notes were changing hands around 90.5 in the late afternoon with stock continuing its upward momentum.

Palo Alto stock traded as high as $152.97 and as low as $141.00 before closing the day at $143.53, an increase of 3.18%.

Stock was up almost 5% on Thursday as the tech sector rallied.

While Palo Alto stock was on the rise, its convertible notes have traded down with sellers willing to hit bids where they see them.

The 0.75% convertible notes closed out last week on a 94-handle, according to Trace data.

Akamai trades

Akamai’s 0.125% convertible notes due 2025 were active on Friday as the stock gave back most of its gains from previous sessions.

The 0.125% notes were changing hands at 108.125 early in the session and traded down to 105.625 shortly before the market close, according to a market source.

Akamai stock traded to a high of $90.03 and a low of $81.95 before closing the day at $82.37, a decrease of 7.29%.

Mentioned in this article:

Akamai Technologies Inc. Nasdaq: AKAM

Booking Holdings Inc. Nasdaq: BKNG

Palo Alto Networks Inc. NYSE: PANW

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