Morning Commentary: Convertibles secondary active; iQIYI gains; NextEra tops par

By Abigail W. Adams

Portland, Me., Jan. 5 – The convertibles secondary space saw another active start to the day with $94 million on the tape about one hour into the session, according to a market source.

Several deals which priced in the final month of the year and initially struggled in the aftermarket were posting gains in the New Year.

iQIYI Inc.’s 4% convertible notes due 2026 traded as high as 102 early in Tuesday’s session before settling back down to a 101-handle, a source said.

There was about $5 million of the bonds on the tape.

iQIYI’s ADSs traded as high as $18.47 on Tuesday and were changing hands at $18.19, an increase of 0.83%, shortly before 11 a.m. ET.

The 4% notes broke par on Monday after trading as low as 97 their initial days in the aftermarket.

iQIYI priced an $800 million issue of the 4% notes on Dec. 17.

NextEra Energy Partners LP’s 0% convertible notes due 2025 topped par for the first time since pricing.

The 0% notes traded as high as 101 early in Tuesday’s session, according to a market source.

NextEra’s stock traded as high as $69.46 early in Tuesday’s session and was changing hands at $68.33, an increase of 1.74%, shortly before 11 a.m. ET.

The 0% notes have largely languished below par since pricing, trading as low as 96 during their initial days in the market.

NextEra priced a $600 million issue of the 0% convertible notes at par on Dec. 1.

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