Morning Commentary: Convertibles trading volume light; all eyes on the U.S. mid-terms

By Abigail W. Adams

Portland, Me., Nov. 5 – The convertibles secondary space opened the week with light trading volume with the primary and secondary market expected to remain quiet until after the U.S. mid-term elections.

There was about $50 million in trading volume on the tape early in the session although few names saw concentrated trading activity.

Microchip Technology Inc.’s 1.625% convertible notes due 2025 were among the most active issues early in Monday’s session with $4 million on the tape, a market source said.

However, the notes were largely unchanged.

They were seen trading around 135.75 with stock down about 2% early in the session.

Microchip is expected to release earnings on Wednesday.

Microchip’s stock has been volatile since the company released its first-quarter earnings report in August where it disclosed accounting problems at the recently acquired Microsemi, which resulted in lower sales guidance.

While not seen trading early Monday, Microchip’s 1.625% convertible notes due 2027 traded in the low 90s last week as stock hit a new 52-week low.

However, the notes rallied outright alongside stock to close last week around 98, according to Trace data.

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