Morning Commentary: Accolade convertibles volatile on debut; ViacomCBS sinks further

By Abigail W. Adams

Portland, Me., March 25 – What is expected to be the last new convertible bond deal of the week hit the secondary space on Thursday.

Accolade Inc. priced $250 million of five-year convertible notes after the market close on Wednesday at par with a coupon of 0.5% and an initial conversion premium of 32.5%.

Pricing came at the cheap end of talk for a coupon of 0% to 0.5% and at the midpoint of talk for an initial conversion premium of 30% to 35%, according to a market source.

The new paper hit the secondary space on another brutal day for equities with equity benchmarks launching the day firmly in the red.

The 0.5% notes traded as low as 98 early in the session.

However, the majority of trades were wrapped around par.

Accolade’s stock was changing hands at $38.18, an increase of 0.21%, shortly before 11 a.m. ET.

Meanwhile, the pain continued for ViacomCBS Inc.’s 5.75% series A mandatory convertible preferred stock.

The par-of-$100 stock traded down to an $82 handle in early activity on Thursday after closing out the previous session on an $85-handle, according to a market source.

ViacomCBS’ stock traded down to $67.55, a decrease of 3.75%, shortly before 11 a.m. ET.

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