Morning Commentary: Alliant Energy convertible notes move lower in early trading

By Abigail W. Adams

Portland, Me., March 21 – It was another quiet start to the day in the convertibles secondary space on Tuesday with sources expecting an uneventful session as the Federal Open Market Committee convenes.

The tone continued to improve as equity indexes added to their gains with the banking sector stabilizing.

Headlines that JPMorgan was advising First Republic Bank on strategic alternatives and Treasury secretary Janet Yellen had pledged intervention to protect deposits at small and mid-sized banks helped boost market sentiment.

However, the Federal Open Market Committee’s rate hike announcement and chair Jerome Powell’s press conference comments on Wednesday will be the defining moment for markets that have undergone a dramatic repricing since Silicon Valley Bank’s collapse.

The market debate is between either no change in interest rates or a 25 basis point increase, a source said.

The Dow Jones industrial average was up 251 points, or 0.78%, the S&P 500 index was up 0.82%, the Nasdaq Composite index was up 0.72% and the Russell 2000 index was up 1.74% shortly before 11 a.m. ET.

There was $61 million in reported volume about one hour into the session with few names seeing concentrated trading activity.

Alliant Energy Corp.’s 3.875% convertible notes due 2026 (BBB+) saw heavy volume early in the session with three large prints in the name.

The 3.875% notes were lower alongside stock after trading up to a new outright high the previous session.

The 3.875% notes were changing hands at 101.875 versus a stock price of $52.63 early in the session, according to a market source.

There was $8.5 million in reported volume.

Alliant Energy’s stock traded down to $52.01, a decrease of 3.26%, shortly before 11 a.m. ET.

The 3.875% notes closed the previous session at 102.5, the highest level for the notes since the $575 million issue priced at par on Feb. 27.

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