Convertibles secondary quiet; Expedia active; Coinbase down outright; Bharti Airtel eyed

By Abigail W. Adams

Portland, Me., June 21 – The convertibles primary market was quiet on Monday despite a strong day for equities.

While no deals were launched on Monday, sources are expecting some deals over the course of the week, which is the last full week of the second quarter.

Meanwhile, the convertibles secondary space was equally quiet on Monday with trading volume light and few notable movements in the space.

There was $96 million on the tape a little over one hour into the session and $382 million on the tape about one hour before the market close with few names seeing concentrated trading activity.

The large outright seller that accounted for the majority of activity during Friday’s session was again active on Monday and offloading several technology names.

Most of the notes for sale were placed close to the bid, a source said.

The activity was most likely the result of a rotation or portfolio adjustment as the end of quarter approaches, the source said.

While unconnected to the outright seller on Monday, Expedia Group Inc.’s 0% convertible notes due 2026 were active and posting gains on an outright basis alongside stock.

Coinbase Global Inc.’s 0.5% convertible notes due 2026 were down on an outright basis as stock dropped alongside the price of Bitcoin.

While activity in the name petered out as the session progressed, Bharti Airtel Ltd.’s 1.5% convertible notes due 2025 were among the most actively traded issues early Monday.

The off-the-run name is not a typical convertible bond with the majority of the issue Regulation S and the underlying equity on the Indian Stock Exchange.

Expedia active

Expedia’s 0% convertible notes due 2026 were active on Monday and posting gains alongside stock.

The 0% notes were up about 1 point outright with stock up 3%.

The notes were changing hands at 109.625 versus a stock price of $166.22 in the late afternoon, a source said.

There was about $11 million of the bonds on the tape, making it one of the most active names in the secondary space.

Expedia’s stock traded to a low of $162.80 and a high of $168.49 before closing the day at $167.92, an increase of 3.06%.

Coinbase down outright

Coinbase’s 0.5% convertible notes due 2026 were trading down on an outright basis alongside stock.

The 0.5% notes were down more than 1.25 points with stock off almost 3%.

The 0.5% notes were changing hands at 97.5 versus a stock price of $221.42 in the late afternoon, according to a market source.

They traded as low as 96.5 heading into the market close, according to Trace data.

Coinbase’s stock traded to a low of $218.77 and a high of $224.99 before closing the day at $222.60, a decrease of 2.92%.

Monday marked the lowest outright level for the notes since Coinbase priced the $1.25 billion issue at a discounted issue price of 99 in mid-May.

The crypto-exchange platform’s stock was under pressure on Monday as Bitcoin sank more than 8% with China ramping up its crackdown on Bitcoin miners.

Bitcoin was trading at $32,625, a decrease of 8.97%, shortly before 5 p.m. ET.

Technical analysis aficionados have been closely watching the price of Bitcoin as it forms a “death cross” pattern with its 50-day moving average dropping below its 200-day moving average over the past few sessions – an indication of future losses.

Forbes.com reported over the weekend that Coinbase co-founder Fred Ehrsam issued a warning that most cryptocurrencies won’t work.

Bharti Airtel on the tape

Bharti Airtel’s 1.5% convertible notes made an appearance on the tape on Monday.

The 1.5% notes were changing hands at 116.5 early in the session with more than $5 million in reported volume.

While the notes were among the most actively traded issues early in the session, activity in the name petered out as the session progressed.

The convertible notes from the New Delhi-based global telecommunications company is not a standard convertible bond.

Bharti Airtel issued $1 billion of the 1.5% notes in January 2020 as part of a Rule 144A and Regulation S offering.

However, only 22% of the total issue size is Rule 144A and the majority of the Rule 144A notes are held by two accounts, a market source said.

The notes are convertible into the company’s shares on the Indian Stock Exchange according to a fixed exchange rate of Rs. 72.0263 per $1.00.

Bharti closed Monday at Rs. 539.25, an increase of 0.093%, on the Indian Stock Exchange.

Mentioned in this article:

Bharti Airtel Ltd. NSE: BHARTIARTL

Coinbase Global Inc. Nasdaq: COIN

Expedia Group Inc. Nasdaq: EXPE

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