Morning Commentary: Convertible bond primary market quiet against flat equity backdrop

Chicago, May 30 – With stock markets modestly up or down on Tuesday morning after the United States’ return from a three-day weekend, the convertible bond market was taking a minute to warm up.

No new deals had been announced before lunch.

Automakers were in focus in the early going, including Tesla, Inc. as Elon Musk conducted his own diplomatic mission to China.

However, his journey failed to shake up the company’s convertible bonds in early action.

Ford Motor Co.’s zero-coupon convertibles due 2026 did garner some attention after Jefferies upgraded the company’s stock to buy from hold and raised the price target.

The convertibles were trading around 1.5 points better on Tuesday morning from where they went out on Friday.

The bigger story of the morning for trading action came from retailer Wayfair Inc.

The company’s 3.5% convertibles due in 2028 jumped in the early going by approximately 4 points to over 105 on news that the company’s stock was being added to JPMorgan’s Analyst Focus list.

Wayfair’s stock was up 5.3% to $38.35 late on Tuesday morning.

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