Illumina convertibles active before maturity; Ford notes improve; Coinbase down outright

By Abigail W. Adams

Portland, Me., May 21 – The convertibles secondary space saw a quiet end to the week with volume muted amid mixed equity markets.

While the Dow Jones industrial average continued its upward momentum and closed Friday up 123 points, or 0.36%; the S&P 500 index closed the day largely flat at negative 0.08% and the Nasdaq Composite finished down 0.48%.

There was $89 million on the tape about one hour into the session and $435 million in reported volume by the mid-afternoon with little notable movement among the names that did trade.

Illumina Inc.’s 0.5% convertible notes due June 15, 2021 were the most actively traded name on Friday with buyers attempting to turn a small profit before the notes mature.

Ford Motor Co.’s 0% convertible notes due 2026 improved on an outright and dollar-neutral basis as stock again approached a 52-week high following a new electric vehicle launch.

ON Semiconductor Corp.’s 0% convertible notes due 2027 remained active as stock seesawed between gains and losses.

While activity in the notes was muted, Coinbase Global Inc.’s 0.5% convertible notes due 2026 gave back their outright gains as stock sank with the price of Bitcoin.

However, the notes were largely unchanged dollar-neutral.

Illumina active

Illumina’s 0.5% convertible notes due June 15, 2021 dominated the tape on a slow day for the secondary space.

The 0.5% notes were changing hands around 154 in the late afternoon.

Illumina’s stock traded to a high of $406.51 and a low of $397.50 before closing the day at $398.62, an increase of 0.54%.

The notes, which mature in one month, are in their averaging period, a source said.

The activity was “an end-of-life trade,” with buyers attempting to turn a small profit before the notes are taken out.

Ford improves

Ford’s 0% convertible notes due 2026 were posting gains on an outright and dollar-neutral basis as stock approached a 52-week high.

The 0% notes rose 3 points outright with stock up more than 6%.

They were changing hands at 105 on Friday afternoon, the highest outright level for the notes since the $2 billion issue priced in late March.

The 0% notes improved about 0.25 point dollar-neutral, a source said.

Ford’s stock traded to a high of $13.47 and a low of $12.57 before closing the day at $13.33, an increase of 6.77%.

Stock hit a 52-week high of $13.62 on March 15. However, stock plummeted in late April after the company slashed its forward guidance due to the global chip shortage.

However, stock has been on a tear since the automaker unveiled its electric F-150 on Wednesday.

Stock was given an extra boost with value stocks in favor on Friday and reports that a high-volume of early orders for the electric truck were coming in.

ON Semiconductor active

ON Semiconductor’s 0% convertible notes due 2027 remained active on Friday following Thursday’s gains.

The 0% convertible notes traded up to 102.5 early in the session but trended lower into the afternoon as stock gave back its early gains.

The notes were changing hands at 102 in the mid-afternoon.

ON Semiconductor’s stock traded to a high of $39.07 and a low of $38.17 before closing the day at $38.22, a decrease of 0.8%.

The 0% notes were also active on Thursday and improved on an outright and dollar-neutral basis.

Underwriters for the deal recently exercised the greenshoe in full lifting the total size of the issue to $805 million.

The 0% notes are a potential add to Refinitiv convertible indices.

Coinbase down outright

While activity in the name was muted, Coinbase’s 0.5% convertible notes due 2025 gave back their outright gains and dropped back down to their discounted issue price with stock volatile following more Bitcoin carnage.

After closing out the previous session at par, the 0.5% convertible notes were marked at 98.875 bid, 99.375 offered in the late afternoon.

While down outright, the notes were largely unchanged dollar-neutral.

Coinbase’s stock was volatile on Friday with stock strong out of the gate. However, it reversed course and turned negative as Bitcoin again plunged below the key support level of $40,000.

Coinbase’s stock traded to a high of $238.97 and a low of $223.90 before closing the day at $224.35, a decrease of 3.88%.

After stabilizing on Thursday, Bitcoin again plunged below $40,000 after China announced plans to crackdown on the mining and trading of the digital currency.

Bitcoin was changing hands at $36,000 shortly after the close of equity markets on Friday.

Mentioned in this article:

Coinbase Global Inc. Nasdaq: COIN

Ford Motor Co. NYSE: F

Illumina Inc. Nasdaq: ILMN

ON Semiconductor Corp. Nasdaq: ON

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