DISH convertible notes continue to gain; Ford trades up outright; DraftKings better

By Abigail W. Adams

Portland, Me., April 22 – It was another quiet day in the convertibles secondary space with trading volume thin, despite a volatile day for equities.

Equity benchmarks were heading toward a second consecutive day of gains but reversed course dramatically after president Joseph Biden announced in the mid-afternoon plans to nearly double the capital gains tax.

“It was like Trump all over again,” a market source said about the sell-off that followed the president’s announced tax plan.

The Dow Jones industrial average closed the day down 321.41 points, or 0.94%, the S&P 500 index closed the day down 0.92%, the Nasdaq Composite closed the day down 0.94% and the Russell 2000 finished down 0.31%.

There was $75 million on the tape about one hour into the session and $668 million in reported volume at the market close, sources said.

There was speculation the dry-up in new issuance and the thin volume over the past week was the result of hedge funds deleveraging themselves as the prime brokerages willing to serve them thin – a continuation of the fallout from Archegos Capital Management’s collapse in late March.

DISH Network Corp.’s convertible notes remained active with the notes continuing to improve as stock again set a new 52-week high.

Ford Motor Co.’s 0% convertible notes due 2026 were active with the notes improved outright although they were largely unchanged dollar-neutral.

DraftKings Inc.’s 0% convertible notes due 2028 remained active with the notes improving dollar-neutral.

DISH gains continue

While equities reversed course and saw a steep sell-off in the mid-afternoon, DISH’s stock continued its upward momentum and posted a fresh 52-week high.

The satellite broadcaster’s convertible notes continued to gain on an outright and dollar-neutral basis along with the common stock.

DISH’s 0% convertible notes were changing hands at 115.5 versus an equity price of $41.84 in the late afternoon.

The notes gained another 0.25 point dollar-neutral, a source said.

The notes were up 1 point dollar-neutral on Wednesday.

The 0% notes were again the most actively traded in the secondary space with about $30 million in reported volume heading into the close.

DISH’s 3.375% convertible notes due 2026 were also active and posting gains.

The notes were up 2 points outright to close the day at 103.

They were improved 0.75 point dollar-neutral.

DISH again set a new 52-week high on Thursday, topping its high from the previous session.

Stock traded to a high of $42.56 and a low of $41 before closing the day at $41.96, an increase of 2.49%.

DISH’s stock and convertible notes popped on Wednesday after the company announced it was partnering with Amazon Web Services to build out its 5G network.

Ford improves outright

Ford’s 0% convertible notes improved on an outright basis in active trading on Thursday although they were largely unchanged dollar-neutral.

The 0% notes were changing hands at 99.25 versus an equity price of $11.92 early Thursday, a source said.

They traded up to 99.5 versus a stock price of $11.94 in the late afternoon.

The notes were posting gains on an outright basis.

While they closed out the previous week above par, they dipped to a 98-handle on Wednesday.

However, the notes were largely moving in line dollar-neutral, a source said.

There was $17.5 million in reported volume.

Ford’s stock traded to a high of $12.15 and a low of $11.83 before closing the day at $11.94, an increase of 1.79%.

DraftKings eyed

DraftKings’ 0% convertible notes due 2028 remained firmly below par in active trading on Thursday.

However, they improved dollar-neutral.

The 0% convertible notes traded as high as 96 during Thursday’s session. However, they dropped back down to 94.75 in the late afternoon as equities sold off.

However, the notes gained 0.25 point dollar-neutral.

DraftKings’ stock traded to a low of $56.51 and a high of $59.67 before closing the day at $57.17, a decrease of 2.74%.

Mentioned in this article:

DISH Network Corp. Nasdaq: DISH

DraftKings Inc. Nasdaq: DKNG

Ford Motor Co. NYSE: F

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