Morning Commentary: Convertibles trading volume ticks up; Wright Medical notes eyed

By Abigail W. Adams

Portland, Me., Aug. 28 – Trading volume in the secondary space picked up on Tuesday after a slow start to the week.

There was about $93 million on the tape early in the session, a combination of end of the month activity and the secondary market returning to full gear after the doldrums on Monday, a market source said.

Wright Medical Group NV’s 1.625% convertible notes due 2023 were volume leaders on Tuesday with the notes climbing on an outright basis alongside stock.

The notes were seen trading at 102.625 on Tuesday with more than $11 million of the bonds on the tape early in the session.

Wright Medical’s stock was up about 4% to $27.88 early in the session.

Wright Medical was upgraded to a “buy” by Needham on Tuesday with a price target set at $30.00.

The upgrade comes after Wright Medical’s stock took a hit on Monday after the medical device company priced a public offering of common stock to fund its acquisition of Cartiva, Inc.

While trading volume was light, the 1.625% convertible notes dropped 1.5 points to 2 points outright as stock dropped 4% on Monday. However, both the company’s convertible notes and stock returned to their previous levels on Tuesday.

Illumina Inc.’s 0% convertible notes due 2023 were once again active in the secondary space. The notes were seen trading at 108.125, a market source said. Illumina stock was largely flat.

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