Weibo improves on China stock rally; Clovis convertibles mixed; Hope Bancorp drops

By Abigail W. Adams

Portland, Me., Oct. 22 – The convertibles secondary space opened the week with light trading volume. There was about $40 million on the tape early Monday and about $300 million on the tape later in the afternoon, sources said.

Weibo Corp.’s 1.25% convertible notes due 2022 were major volume movers in the secondary space as its American Depositary Shares shot up after a rally in China’s stock market.

Clovis Oncology Inc.’s convertible notes were mixed as the company’s equity got “its knees blown out,” a market source said.

Clovis’ 1.25% convertible notes due 2025 were unchanged dollar-neutral as the 2.5% convertible notes due 2021 contracted.

NXP Semiconductors NV’s 1% convertible notes due Dec. 1, 2019 were active although unchanged during Monday’s session.

Hope Bancorp. Inc.’s 2% convertible notes due 2038 dropped on an outright basis as stock hit a new 52-week low post-earnings.

Weibo gains

Weibo’s 1.25% convertible notes due 2022 were active as its depositary shares shot up following a rally in China’s stock market.

The 1.25% notes were up about 1 point outright.

They were seen changing hands at 90.25 versus an equity price of $60.64, according to market sources. The yield on the notes is 3.789%.

The Beijing-based social networking site’s equity closed Monday at $60.87, an increase of 6.81%.

With about $10 million on the tape by the late afternoon, the notes were a major volume mover in the space.

China’s stock market saw its best day in more than two years after dropping more than 25% since January, CNN Business reported.

The boost came after China’s president and other senior officials vowed to support China’s technology companies.

While up on Monday, the premium on the 1.25% notes is still well over 100%.

The notes were trading in the 120 range in March but dropped after stock cratered after the release of first-quarter earnings in May.

The 1.25% notes have traded below par since July, according to Trace data.

Weibo stock was $90.35 when the company priced the $900 million issue in October 2017.

Clovis mixed

Clovis Oncology’s convertible notes were mixed as its stock tanked more than 20% during Monday’s session.

The biotech company’s 1.25% convertible notes due 2025 dropped about 3.5 points outright.

The notes were quoted at 72.5 bid, 73.5 offered, a market source said.

They were seen changing hands at 74 versus a stock price of $21.75 in the late afternoon with more than $6 million of the bonds on the tape.

The notes were unchanged dollar-neutral.

While less active, Clovis’ 2.5% convertible notes due 2021 were contracting dollar-neutral.

They were quoted at 89 bid, 89½ offered and were contracted about 0.75 point, a market source said.

After trading as low as $20.54, Clovis stock closed Monday at $21.12, a decrease of 19.88%.

Clovis stock spiraled downwards after AstraZeneca and Merck released positive clinical data for a competing treatment for ovarian cancer to Clovis’ Rubacra.

NXP active

NXP Semiconductors saw another day of active trading in the secondary space although the notes were unchanged dollar-neutral, sources said.

The 1% notes due Dec. 1, 2019 were changing hands just south of 102 versus an equity price of $76.83. They were moving in line dollar-neutral, a market source said.

About $8 million bonds were on the tape by late afternoon.

NXP stock closed Monday at $76.48, a decrease of 1.57%.

Hope decreases

While trading petered out in the afternoon, Hope Bancorp’s 2% convertible notes due 2038 were among the most active in the space early in the session.

The notes were changing hands at 88.5 with a yield to worst of 4.84%, a market source said.

Hope stock closed Monday at $13.89, a decrease of 3.47%.

While Hope has a low vol. stock, it has trended downwards since releasing its third-quarter earnings report on Oct. 16.

Earnings were in line with the consensus estimate of earnings per share of 36 cents for the third quarter.

The holding company for Bank of Hope, the only regional Korean-American bank in the United States, also announced a dividend of 14 cents and a $50 million share buyback program.

However, several analysts have lowered their year-end earnings estimate for the financial institution since the earnings report was released.

Hope priced $217.5 million of the 2% convertible notes at par in May.

Mentioned in this article:

Clovis Oncology Inc. Nasdaq: CLVS

Hope Bancorp. Inc. Nasdaq: HOPE

NXP Semiconductors NV Nasdaq: NXPI

Weibo Corp. Nasdaq: WB

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.