Morning Commentary: Month-end, upcoming holiday weigh on convertibles market; Arconic slides

By Stephanie N. Rotondo

Seattle, June 30 – Trading in the convertible bond market was slowing down early Friday as market players focused on month-end activities and an upcoming holiday.

Even EZCorp Inc.’s new 2.875% convertible notes due 2024 – a $125 million issue that priced Thursday with an initial conversion premium of 30% – was not getting much attention.

However, a market source did see the bonds rising nearly a point to 101.25. The underlying stock (Nasdaq: EZPW) was also better, firming 17 cents, or 2.29%, to $7.82.

Meanwhile, Arconic Inc.’s 5.375% series 1 class B mandatory convertible preferred stock (NYSE: ARNCPrB) remained under pressure, as the company continued to generate bad news.

The convertible preferreds were off 99 cents, or 2.74%, at mid-morning, trading at $35.10. Notably, the preferreds were trading at $42.55 just a month ago.

The company’s equity (NYSE: ARNC) wasn’t faring all that well either, dipping 52 cents, or 2.28%, to $22.30.

It was reported Thursday that the lightweight metals engineering and manufacturing company might have been responsible for a delay in the launch of Boeing Co.’s 737 Max jet last month. This comes in the wake of revelations that one of Arconic’s products was used in the cladding system at Grenfell Tower in London, which caught fire earlier this month, killing about 80 people and injuring at least 70 others.

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