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Morning Commentary: Expedia convertibles active on quiet morning; Ford notes lower
By Abigail W. Adams
Portland, Me., Feb. 6 – The convertibles primary market was dormant and the secondary space quiet early Monday as equities continued to pull back with markets once again expressing doubt about a dovish pivot from the Federal Reserve.
The Dow Jones industrial average was down 177 points, or 0.52%, the S&P 500 index was down 0.77%, the Nasdaq Composite index was down 0.96% and the Russell 2000 index was down 1.49% shortly before 11 a.m. ET.
There was $45 million in reported volume about one hour into the session with only one name seeing more than $5 million on the tape.
Expedia Inc.’s 0% convertibles due 2026 (Baa3/BBB-/BBB-) saw heavy volume early in the session with two $5 million trades on the tape, a source said.
The notes saw little movement in price in the heavy volume and remained wrapped around 92.
Expedia’s stock wavered between gains and losses early Monday and was changing hands at $117.50, a decrease of 1.02%, shortly before 11 a.m. ET.
While volume in the name was light, Ford Motor Co.’s 0% convertible notes due 2026 continued to fall outright alongside stock after last week’s earnings disappointment.
The 0% convertible notes were off another 1 point outright with stock down 3% in early trading.
The notes were changing hands at 100.125 versus a stock price of $13.15 early in the session.
Ford’s stock was trading at $12.84, a decrease of 2.91%, shortly before 11 a.m. ET.
The 0% convertible notes traded as high as 105.25 with stock on a strong uptrend heading into Ford’s earnings announcement late last week.
However, Ford’s stock and convertible notes have given back most of those gains with earnings a disappointment.
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