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Morning Commentary: MercadoLibre better outright; Cree flat; Exact Sciences in focus
By Abigail W. Adams
Portland, Me., Aug. 23 – The frenzy surrounding the new paper to enter the convertibles secondary space died down on Thursday. Trading volume was relatively light early in the session with about $57 million on the tape.
MercadoLibre, Inc.’s new 2% convertible notes due 2028 continued to improve on an outright basis on Thursday while the notes remained contracted dollar-neutral.
The 2% notes were seen trading at 101.375 early in the session with stock up about $4 to $349.00, a market source said. While the notes were up outright, they were trading in line dollar-neutral. About $5 million of the bonds were on the tape early in the session.
The 2% notes got “taken to the woodshed” on Wednesday with the notes trading as low as 98.5 out of the gate but gaining some steam to close the day around par. The notes were contracted 1 point to 2 points dollar-neutral on Wednesday.
“I’m guessing people didn’t want the EM risk,” a market source said. However, the Buenos Aires-based e-commerce company’s convertible bonds are dollar bonds converting into dollar American Depositary Receipts, the source said.
Cree, Inc.’s newly priced 0.875% notes due 2023 also saw light trading activity early Thursday with about $3 million of the bonds on the tape. The notes were largely unchanged. They were seen trading at 100.4 with stock up slightly.
The 0.875% notes were largely flat on their market debut on Wednesday.
Exact Sciences Corp.’s 1% convertible notes due 2025 remained in focus in the secondary space with the notes continuing to see gains on an outright basis.
The notes were the volume leaders in the secondary space early in the session with more than $9 million on the tape.
They were seen up another 8 points outright to trade at 118 with stock up another 7.14%.
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