Morning Commentary: Convertibles trade quietly amid Columbus Day lull; Tesla in focus

By Rebecca Melvin

New York, Oct. 8 – The U.S. convertibles market started the week on a quiet note on Monday as equities bounced around but edged mostly lower and the bond market remained closed in observance of the Columbus Day holiday, a New York-based trader said.

The trader said that there was very little going on with most departments in his firm emptied by the holiday. Convertibles trading was light and there were no discernible trends regarding how they were holding up against equities.

Tesla Inc. remained a focus and was the day’s top traded name in convertibles, according to Trace data. Tesla shares have lost 17% since Oct. 1 as the fallout from Department of Justice and Securities and Exchange Commission probes continue for the Palo Alto, Calif.-based electric carmaker.

The Tesla 1.25% notes due 2021 were quoted at 96 bid, 96.5 offered. Shares were bouncing around but eventually extended their move lower, trading last down $4.21, or 1.6%, at $257.74 at late morning.

The company has been reeling since August when chief executive Elon Musk tweeted about taking the company private. The DOJ probe is being conducted in tandem with a civil fraud probe by the SEC.

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