Morning Commentary: Convertibles space quiet; GSD Holdings trades up; Intel notes active

By Abigail W. Adams

Portland, Me., June 1 – Trading volume was light in the convertibles space early in Friday’s session with the flurry of activity surrounding new paper from GDS Holdings Ltd. dying down.

While only about $3 million bonds were on the tape, GDS Holdings’ new 2% convertible notes due 2025 were trading up on an outright basis.

The 2% convertible notes were quoted at 101 bid, 101¾ offered and were seen trading into the bid at 101, a market source said.

After dominating trading activity on their market debut Thursday with more than $86 million bonds in play, GDS Holdings’ 2% notes are not expected to see much activity on Friday.

Intel Corp.’s 3.25% convertible notes due 2039 were the volume leader early in Friday’s session as the company’s stock climbed almost 3%, a market source said. There were some large block trades of the notes at 266.5, which was largely flat from Thursday, according to Trace data.

Workday Inc.’s 0.25% notes due 2022 were also active early in the session with the notes dropping alongside stock after the financial and human capital software vendor released its first-quarter earnings report after the market close on Thursday.

The 0.25% notes dropped about 2 points outright as stock dropped about 5%. They were seen trading at 107.75 versus a stock price of $124.26.

While Workday topped analyst expectations with non-GAAP earning per share of 33 cents, compared to the expected earnings per share of 26 cents, Workday stock took a hit on its 2019 subscription revenue forecast.

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