Convertible bond market subdued, mixed as week concludes; Spirit Realty rises; Ctrip steady

By Stephanie N. Rotondo

Seattle, Nov. 11 – Election fatigue and the Veterans Day holiday were weighing on the convertible bond market’s liquidity early Friday.

“There is very little going on,” a trader said, noting that the bond market was closed for the holiday.

Movements were also mixed in mid-morning trading.

Spirit Realty Capital Inc. was among the day’s gainers, as a market source saw the 2.875% convertible notes due 2019 adding nearly a point to trade in the 102.75 area.

The Dallas-based real estate investment trust’s stock closed up 33 cents, or 3.22%, at $10.59. The equity was up 46 cents, or 4.48%, at $10.72 at mid-morning.

Meanwhile, Ctrip.com International Ltd.’s convertible bonds were being eyed. A trader said “most of the volume” in the name was occurring in the 1.25% convertible notes due 2018.

At 118.25, the trader noted that was a 15-point premium on a 1.25% coupon.

Another source pegged the 1.25% convertible notes due 2022 around 97.

Both issues were unchanged to a shade softer on the day.

The equity underlying the debt was initially on the weaker side, slipping 50 cents, or 1.22%, to $40.48. However, it ended up 12 cents at $41.10.

Ctrip is a travel services provider based in China. Last month, the company said it wants to open up its business to U.S. travelers looking to vacation in China and other parts of Southeast Asia.

The company is expected to release its latest quarterly results on Nov. 16.

There was meantime little follow-through in Encore Capital Group Inc.’s convertible bonds, even as the stock attempted to edge higher.

While the stock hit a high of $26.55 in Friday trading – a gain of 50 cents day over day – it finished the session off 50 cents, or 1.92%, at $25.55.

The name began to push up on Thursday after the San Diego-based debt management and recovery company reported earnings.

For the quarter, the company posted adjusted earnings per share of 14 cents from continuing operations. Revenue was $179 million.

Analysts polled by Thomson Reuters had forecast EPS of $1.23 on revenue of $286.1 million.

Green Plains Inc. also remained on the muted side, even as its equity continued to sell off.

The stock ended at $22.50, down $1.50, or 6.25%.

Shortly before the close, a trader saw the stock off $1.35 for the day and down 10% since Tuesday. Companies like the Omaha-based ethanol company have come under pressure since the election, as Donald Trump, the president-elect, has been more pro-coal and other fossil fuels and less of a fan of cleaner energy.

Mentioned in this article:

Ctrip.com International Ltd. Nasdaq: CTRP

Encore Capital Group Inc. Nasdaq: ECPG

Green Plains Inc. Nasdaq: GPRE

Spirit Realty Capital Inc. NYSE: SRC

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