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Convertible bonds flat as trading thins in final week of August; Altaba follows stock down
By Stephanie N. Rotondo
Seattle, Aug. 28 – The convertible bond market was again muted in Monday trading, though there were a few exceptions.
There was “nothing doing,” a trader said.
In fact, at mid-morning the total trading volume in the convertibles realm amounted to less than $40 million, according to a market source.
Among the most active issues – relatively speaking – Altaba Inc.’s 0% convertible notes due 2018 were following the company’s stock lower.
A source saw the notes sliding nearly 2 points to around 124.20. A second source also called the debt 2 points lower at 124.25.
The underlying equity was meantime down 98 cents, or 1.52%, at $63.53.
There was no fresh news out on the name to cause the weakness.
Teladoc Inc. was notable on Monday, as the company stock rose nearly 10% on news Blue Cross and Blue Shield Service Benefit Plan – also known as the Federal Employee Program – had selected the company to provide its general medical and behavioral health services for the 2018 benefit year.
In response, the 3% convertible notes due 2022 jumped to a 106.5 to 107.5 context, which compared to previous levels on either side of 101.
Teladoc’s equity jumped $2.80, or 9.38%, to $32.95.
Also in the health space, WebMD Health Corp.’s 2.625% convertible notes due 2023 were seen trading just shy of par, which was deemed unchanged.
WebMD shares ticked up a nickel to $66.37.
While the online health information provider’s convertible bonds have seen modest trading in the last month, the paper has moved very little since the company announced on July 24 that it was being bought by KKR & Co. for $2.8 billion.
The takeover triggered a make-whole premium on the company’s convertible debt, which increased the conversion rate for each debenture.
Mentioned in this article:
Altaba Inc. Nasdaq: AABA
Teladoc Inc. NYSE: TDOC
WebMD Health Corp. Nasdaq: WBMD
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