Greenbrier down outright, up dollar-neutral; Haemonetics trends lower; j2 Global active

By Abigail W. Adams

Portland, Me., April 20 – The convertibles primary market was again quiet on Tuesday with no new deals announced.

While there may be a smattering of deals before the week is through, primary market activity is expected to remain muted as the market enters into the heart of earnings season.

Meanwhile, it was another weak day in the convertibles secondary space with the tech sector again leading losses for equity benchmarks, which closed the day in the red.

The Dow Jones industrial average closed the day down 256 points, or 0.75%; the S&P 500 closed the day down 0.68%; the Nasdaq composite closed the day down 0.92%; and the Russell 2000 index ended down 1.96%.

While the secondary space was weak, trading volume was light with $63 million on the tape about one hour into the session and $428 million in reported volume heading into the market close.

Haemonetics Corp.’s 0% convertible notes due 2026 remained active with the notes trading lower on an outright basis as stock continued its downward spiral.

While the notes continued to improve dollar-neutral, Greenbrier Cos., Inc.’s 2.875% convertible notes due 2028 traded down to a par-handle with stock under pressure during Tuesday’s session.

j2 Global, Inc.’s 3.25% convertible notes were among the top volume movers on Tuesday after the company announced plans to call the notes in June.

Haemonetics trades down

Haemonetics’ 0% convertible notes due 2026 continued to trade down on an outright basis with stock continuing its descent on Tuesday.

The notes were changing hands at 82.137 versus a stock price of $70.06 early Tuesday, according to a market source.

They were trading at 81.5 versus a stock price of $68.04 in the late afternoon.

The notes remained among the most actively traded during Tuesday’s session with $26 million in reported volume heading into the market close.

Haemonetics’ stock traded to a high of $71.74 and a low of $66.47 before closing the day at $66.69, a decrease of 10.7%.

Stock was down more than 34% on Monday after the global provider of blood and plasma supplies and services announced in the previous session the termination of a contract that accounted for 11.8% of its total revenue.

Haemonetics priced a $500 million issue of the 0% convertible notes due 2026 at par in early March versus a stock price of $125.24.

Greenbrier on par-handle

Greenbrier’s 2.875% convertible notes due 2028 traded down to a par-handle with stock under pressure on Tuesday.

The notes, which traded north of 103 on Monday, were changing hands at 100.625 versus a stock price of $41.18 in the late afternoon.

While down on an outright basis, the notes improved another 0.25 point dollar-neutral, a source said.

Greenbrier’s stock traded to a high of $43.72 and a low of $40.90 before closing the day at $41.59, a decrease of 5.22%.

In addition to an off-day for equities, Greenbrier’s stock was moving lower on news about a bidding war between railroad companies Canadian National and Canadian Pacific for Kansas City Southern.

The prospective merger in the railroad industry may have implications for Greenbrier, which is a supplier of equipment and services to the freight rail transportation markets, a source said.

j2 Global’s call

j2 Global’s 3.25% convertible notes due 2029 were active after the company announced its intention to call the notes in June.

The deep-in-the-money convertible notes were trading at parity on the news.

They were changing hands at 193.5 versus a stock price of $131.21 in the late afternoon, according to a market source.

The bonds are mostly held by hedge funds, a source said.

There was about $15 million of reported volume heading into the market close.

j2 Global’s stock traded to a high of $135.24 and a low of $129.22 before closing the day at $129.36, an increase of 1.04%.

The Los Angeles-based digital media and provider of business cloud services announced plans to redeem the 3.25% notes after June 20 when they become callable.

j2 Global priced a $350 million issue of the 3.25% convertible notes due 2029 in 2014.

The company also has a $550 million issue of 1.75% convertible notes due 2026 outstanding.

The call announcement came alongside the company’s announced plans to spin j2 Global and Consensus into two independent publicly traded companies.

Consensus will primary consist of the cloud fax business in j2’s cloud services division.

The 1.75% notes were not active on the news. They last traded around 121, according to Trace data.

Mentioned in this article:

Greenbrier Cos., Inc. NYSE: GBX

Haemonetics Corp. NYSE: HAE

j2 Global, Inc. Nasdaq: JCOM

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