Tech sector rips on final day of quarter; Spotify, BlackLine, Redfin convertibles up

By Abigail W. Adams

Portland, Me., March 31 – It was an active end to the quarter in the convertibles secondary space as the tech sector broke its rout and lifted several recent deals that have languished below par.

There was $112 million in reported convertibles trading volume about one hour into the session and $738 million on the tape about one hour before the market close, sources said.

While the Dow Jones industrial average closed the day down 0.26%, the S&P 500 index was up 0.36% to end the quarter at a fresh record, the Nasdaq composite popped 1.54% and the Russell 2000 closed the day up 0.36%.

Ford Motor Co.’s 0% convertible notes due 2026 continued to dominate the tape with the notes grinding higher.

Several recent deals, which have struggled in the aftermarket, were in focus and posting gains alongside their equity.

Spotify Technology SA’s 0% exchangeable notes due 2026 were brushing up against par after languishing in the low 90s for most of March.

BlackLine Inc.’s 0% convertible notes due 2026 were also on the rise in active trading.

Redfin Corp.’s 0.5% convertible notes due 2027 topped par for the first time since it hit the aftermarket on March 23.

Ford gains continue

Ford’s 0% convertible notes due 2026 continued to grind higher on an outright and dollar-neutral basis on Wednesday.

The notes traded up to a 101-handle with stock off 1.69%.

The 0% convertible notes were changing hands just shy of 101.375 versus an equity price $12.39 early in the session, according to a market source.

They were trading just north of 101.5 in the late afternoon.

There was more than $50 million on the tape.

Ford’s stock traded to a high of $12.54 and a low of $12.21 before closing the day at $12.25, a decrease of 1.69%.

The notes topped par on Tuesday after trading on a 99-handle the previous week.

The notes, alongside several other recent issues, have improved in the final days of the quarter as the new issue calendar slowed down.

Lifted

Several recent deals that struggled amid the pullback in the tech sector in March were lifted as the sector ripped higher on the final day of the first quarter.

Spotify’s 0% notes due 2026 exchangeable for Spotify USA Inc. shares were brushing up against par on Wednesday after trading in the low 90s for much of March.

The 0% notes gained almost 7 points Wednesday with stock up almost 4%.

The notes were changing hands at 99.625 versus an equity price of $269.77.

There was more than $17 million on the tape.

Spotify’s stock traded to a high of $271.87 and a low of $263.90 before closing the day at $267.95, an increase of 3.98%.

Spotify’s exchangeable notes have struggled since hitting the aftermarket on Feb. 26 with the company particularly hard hit by the sell-off in the tech sector.

BlackLine’s 0% convertible notes due 2026 were also posting gains in active trading.

The 0% notes rose 3 points outright with stock up about 4%.

They were changing hands at 98 versus an equity price of $108.74 in the late afternoon.

BlackLine’s stock traded to a high of $110.37 and a low of $106.22 before closing the day at $108.40, an increase of 3.65%.

BlackLine priced a $1.15 billion issue of the 0% convertible notes in early March versus a stock price of $116.655.

Redfin’s 0.5% convertible notes due 2027 topped par for the first time since hitting the aftermarket.

The notes gained almost 3 points outright with stock up 3.53%.

The 0.5% notes were changing hands just north of 102 versus a stock price of $66.90 in the late afternoon.

There was about $7.5 million in reported volume in the late afternoon.

Redfin’s stock traded to a high of $67.61 and a low of $65 before closing the day at $66.59, an increase of 3.53%.

After falling flat on its aftermarket debut on March 23, the 0.5% notes sank below par. Wednesday marked the first day the notes topped par since pricing.

Mentioned in this article:

BlackLine Inc. Nasdaq: BL

Ford Motor Co. NYSE: F

Redfin Corp. Nasdaq: RDFN

Spotify Technology SA NYSE: SPOT

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