Convertibles secondary firm as equities set records; Peloton up; Ford, Fortive active

By Abigail W. Adams

Portland, Me., April 1 – The convertibles secondary space saw a firm start to the second quarter as equities broached new records.

The S&P 500 surpassed 4,000, closing the day at 4,019.87, an increase of 1.18%.

The tech sector continued to rip with the Nasdaq Composite closing the day up 1.76%.

Small-cap stocks also joined the rally with the Russell 2000 closing the day up 1.30%.

While the secondary space was active on the holiday-shortened week, the majority of activity remained end-of-month and end-of-quarter cleanup.

There was $127 million on the tape about one hour into the session and $651 million on the tape heading into the market close, sources said.

Peloton Interactive Inc.’s 0% convertible notes due 2026 were active early in the session as the company’s stock popped although it came in as the session progressed.

Ford Motor Co.’s 0% convertible notes due 2026 remained active although the notes were little changed.

BlackLine Inc.’s 0% convertible notes due 2026 remained active with the notes continuing to grind higher on an outright basis.

Outside of recent deals, Fortive Corp.’s 0.875% convertible notes due 2022 saw heavy volume although with little movement in price.

Peloton improves

Several recent deals continued to improve as the tech sector ripped into the new quarter after ending the last one on strong footing.

While activity in the name tapered as the session progressed, Peloton’s 0% convertible notes due 2026 rose 1 point as stock popped early in the session.

The convertible notes were changing hands just shy of 96.5 early in the session versus a stock price of $115.49, according to a market source.

Peloton’s stock traded to a high of $118.96 shortly after the opening bell.

However, stock came in as the session progressed and traded to a low of $111.67 before closing the day at $112.09.

While stock was improved on Thursday, it was particularly hard hit as investors rotated away from some of the high-flyers during the Covid-19 pandemic.

While Peloton’s 0% convertible notes initially outperformed in the aftermarket, they dropped to the low 90s as stock sold off alongside the broader tech sector in early March.

Peloton priced a $1 billion issue of the 0% convertible notes on Feb. 8 versus a stock price of $144.99.

BlackLine grinds higher

BlackLine’s 0% convertible notes due 2026 remained active on Thursday with the notes continuing to grind higher.

The 0% convertible notes rose 1 point outright with stock up more than 2%.

The 0% notes were changing hands at 99.185 versus an equity price of $110.85, according to a market source.

There was more than $13.5 million on the tape.

BlackLine’s stock traded to a high of $112.33 and a low of $109.63 before closing the day at $111.30, an increase of 2.68%.

Active issues

Ford’s 0% convertible notes due 2026 continued to see heavy volume in the secondary space.

After trading north of 101 during Wednesday’s session, the 0% notes came in slightly.

They were changing hands at 100.875 versus a stock price of $12.23 in the late afternoon.

There was more than $15 million in reported volume.

Ford’s stock traded to a high of $12.29 and a low of $12.02 after closing the day at $12.17, a decrease of 0.65%.

Fortive’s 0.875% convertible notes due 2022 also saw heavy volume on Thursday, which sources attributed to end-of-month and end-of-quarter cleanup.

The 0.875% convertible notes were changing hands at 101.25 in the late afternoon.

There was more than $21 million of the bonds on the tape.

Fortive’s stock traded to a high of $71.43 and a low of $69.42 before closing the day at $70.90, an increase of 0.38%.

Mentioned in this article:

BlackLine Inc. Nasdaq: BL

Ford Motor Co. NYSE: F

Fortive Corp. NYSE: FTV

Peloton Interactive Inc. Nasdaq: PTON

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