Morning Commentary: Southwest Airlines convertibles active early; Coinbase notes gain

By Abigail W. Adams

Portland, Me., May 20 – The convertibles secondary space saw decent volume early in Thursday’s session. However, activity was centered on two names – Coinbase Global Inc. and Southwest Airlines Co.

Coinbase’s 0% convertible notes due 2026 improved on an outright basis as stock recovered from Wednesday’s sell-off and Bitcoin stabilized.

The 0% convertible notes popped above their discounted issue price of 99.

They were changing hands at 99.625 bid, par offered early in the session with stock up almost 4%.

While the notes, which closed Wednesday on a 97-handle, improved outright, they gave back some of their dollar-neutral gains.

The notes contracted about 0.25 to 0.375 point dollar-neutral, a source said. The notes expanded upwards of 1 point on their aftermarket debut on Wednesday.

Coinbase’s stock was changing hands at $234.10, an increase of 4.14%, shortly before 11 a.m. ET.

The price of Bitcoin also stabilized following Wednesday’s sell-off and was changing hands at $41,648.70 early in Thursday’s session.

Southwest Airlines’ 1.25% convertibles due 2025 also saw heavy volume early Thursday although with little movement in price.

The 1.25% convertible notes were trading at 167.25.

Southwest Airlines’ stock was $59.75, a decrease of 1.06%, shortly before 11 a.m. ET.

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