Etsy convertibles in focus, expand in secondary; lllumina active; Apellis a ‘winner’

By Abigail W. Adams

Portland, Me., July 2 – It was a quiet end to the week with volume in the convertibles secondary space light as the U.S. market entered into the Fourth of July holiday weekend.

There was $38 million on the tape about one hour into the session and $215 million in reported volume about one hour before the market close, sources said.

Etsy Inc.’s 0.25% convertible notes due 2028 remained in focus with the notes continuing to expand after a strong run over the past week.

Illumina Inc.’s 0% convertible notes due 2023 also saw heavy volume with the issue the last one standing after the company’s 0.5% convertible notes matured on June 15.

While volume in the off-the-run name was light, Apellis Pharmaceuticals Inc.’s 3.5% convertible notes due 2026 were among the major gainers of week as stock surged following a new partnership.

Etsy notes eyed

Etsy’s 0.25% convertible notes due 2028 were in focus on Friday with the notes expanding as stock came in after a strong run over the past week.

The 0.25% convertible notes held their previous level as stock continued to come in from its recent heights.

The 0.25% convertible notes were changing hands at 108.625 versus a stock price of $198.68, according to a market source.

The notes continued to trade around 108 heading into the afternoon.

There was more than $20 million in reported volume.

Etsy’s stock traded to a high of $202.39 and a low of $195.83 before closing the day at $197.57, a decrease of 0.97%.

The 0.25% convertible notes have been active throughout the week as stock surged following Etsy’s announcement that it was acquiring Elo7, a Brazilian e-commerce site, for $217 million.

Stock traded as high as $207 on Thursday before coming in.

Illumina on the move

Illumina’s 0% convertible notes due 2023 continued to trade actively with the 0% notes the last outstanding issue of the gene sequencing analytics company.

The 0% convertible notes were changing hands at 126.875 heading into the market close.

Illumina’s stock traded to a low of $469.01 and a high of $477.96 before closing the day at $474.73.

The notes are “very overpriced,” a source said.

However, they are one of the few investment-grade pieces of paper in the convertibles space and are sought after, especially by European buyers.

The 0% convertible notes are also the last outstanding convertibles issue from the company after Illumina’s 0.5% convertible notes matured on June 15.

Apellis up on week

While volume in the off-the-run name was light, Apellis’ 3.5% convertible notes due 2026 were among the major gainers of the week.

The 3.5% convertible notes traded as high as 206 during Friday’s session but came in alongside stock to close the day around 200, according to a market source.

Apellis’ stock traded to a low of $68.41 and a high of $73 before closing the day at $69.84, an increase of 3.01%.

The 3.5% convertible notes rose more than 14 points outright since the start of the week with stock up over 7%.

Stock has steadily climbed since Wednesday when the biotech company announced a new collaboration with Beam Therapeutics Inc. to use Beam’s technology to discover new treatments for the eye, liver and brain.

The notes do not trade much on hedge and are mostly held by outright accounts, a source said.

“For the outright guys that own it, it’s been a nice winner,” the source said.

Mentioned in this article:

Apellis Pharmaceuticals Inc. Nasdaq: APLS

Etsy Inc. Nasdaq: ETSY

Illumina Inc. Nasdaq: ILMN

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