Morning Commentary: Convertibles trading volume light; YY, Palo Alto converts active

By Abigail W. Adams

Portland, Me., July 11 – The convertibles secondary space was again quiet early in Thursday’s session with $55 million in reported volume about one hour into the session.

YY Inc.’s 1.375% convertible notes due 2026 remained in focus with the notes down slightly on an outright basis. The notes were changing hands at 101 early in the session, a market source said.

They saw more than $6 million in reported volume about one hour into the session.

While YY’s equity was up shortly after the opening bell it quickly came in and was changing hands at $68.76, an increase of 1.02%, shortly before 11 a.m. ET.

YY’s two tranches of convertible notes were in focus on Wednesday with a lot of buying activity prior to their inclusion in the Thomson Reuters Convertibles Indices, sources said.

YY’s 1.375% notes and 0.75% notes due 2025 will be added to the index today.

Palo Alto Networks Inc.’s 0.75% convertible notes due 2023 were also active and gained about 0.5 point outright with stock up.

The notes were changing hands at 108.5, a market source said.

The notes also saw about $6 million in reported volume.

Palo Alto stock was trading at $217.91, an increase of 1.5% shortly before 11 a.m. ET.

Stock was on the rise following the completion of its acquisition of cybersecurity startup Twistlock.

Stock initially traded down following the company’s third-quarter earnings report in May due to concerns the acquisition would negatively impact fourth-quarter earnings.

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