Convertibles primary quiet; Splunk mostly higher; NIO’s convertibles soft; Fluor slips

By Cristal Cody

Tupelo, Miss., Sept. 25 – With the convertibles primary market quiet as the week kicked off, market focus shifted to a few names that made headlines over the session.

Light primary action is most likely on the near-term calendar, according to market sources.

“A lot of issuers are entering blackout periods now,” one source said.

While there were “no deals in the market right now,” other names moved on Monday, a source said.

Secondary activity picked up by the afternoon with about $430 million of reported volume after trading topping $108 million nearly an hour after the market opened.

Stocks also improved after seeing some softness in early trading.

The S&P 500 index finished up 0.4%, the Nasdaq rose 0.45%, the Dow Jones industrial average improved 0.13% and the Russell 200 index added 0.44%.

Splunk Inc.’s convertible notes traded flat to modestly higher over the day, while its stock declined after improving early in the session.

Trading was strong with the company’s two tranches among the most active convertible bonds on Monday.

The 1.125% convertible notes due 2025 edged higher on $8 million of volume.

NIO Inc.’s new 3.875% convertible senior notes due 2029 slid over 2 points in early trading on Monday following news reports the company had denied plans for another capital raise, but activity thinned in the issue by late in the day, a source said.

Fluor Corp. announced Monday that it has exercised its mandatory conversion rights on its outstanding series A 6.5% cumulative perpetual convertible preferred stock.

The transaction follows the company’s convertible debt offering in the prior month.

Trading levels were relatively unchanged on the back of the news at the start of the session but the bonds declined more than 1.5 points by the end of the day.

Fluor’s stock was down nearly 2%.

The mandatory call “should have been expected,” a source said.

Splunk flat to higher

Splunk’s convertible notes went out unchanged to modestly higher on the day in some of the session’s most active issues, a source said.

The 1.125% convertible notes due 2025 picked up slightly to head out at 107 versus a stock price of $144.82 on $8 million of volume.

Over the morning, the notes traded mostly unchanged at just under 107 versus a stock price of $144.88 on $4 million of volume.

Splunk’s 1.125% convertible notes due 2027 were flat at a print of 93.90 with an equity price of $144.94. Trading volume totaled $6.4 million on Monday.

The company’s shares closed the day down 0.19% at $144.80.

NIO soft

NIO’s new 3.875% convertible senior notes due 2029 traded early Monday over 2 points lower at 98 versus a stock price of $89.97 following news reports the company had denied plans for another capital raise, a source said.

Volume totaled $2.25 million.

Activity thinned by the afternoon with the issuer not seen among the day’s most active convertible bonds trading, according to a market source.

In the prior week, NIO priced $1 billion of convertible notes at par in two tranches, including the 2029 issue.

NIO’s American Depositary Shares declined 2.11% on the day to $8.35, a dime short of the day’s high.

Shares fell 2.17% late morning to $8.34 and traded as low as $7.93 on Monday.

Fluor declines

Fluor’s 1.125% convertible notes due 2029 declined more than 1.5 points to 102.323 versus an equity price of $35.87 by the day’s end, a source said.

Volume hit $5.4 million in the notes.

Fluor announced Monday that it has exercised its mandatory conversion rights on its outstanding series A 6.5% cumulative perpetual convertible preferred stock.

The transaction follows the company’s convertible debt offering in the prior month.

Trading levels were relatively unchanged on the back of the news at the start of the session, a source said.

Fluor’s stock was down 1.63% at $36.27 by late morning and closed 1.84% lower at $36.19.

Shares traded as low as $35.62 and as high as $36.54 over the session.

Mentioned in this article:

Fluor Corp. NYSE: FLR

NIO Inc. NYSE: NIO

Splunk Inc. Nasdaq: SPLK

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