Morning Commentary: DISH convertible notes in focus amid offering of straight debt

By Abigail W. Adams

Portland, Me., Nov. 8 – It was a slow start to the week in the convertibles secondary space as equity markets extended their gains early in Monday’s session.

The Dow Jones industrial average was up 130 points, or 0.36%, the S&P 500 index was up 0.19%, the Nasdaq Composite was up 0.15% and the Russell 2000 index was up 0.77% shortly before 11 a.m. ET.

There was $90 million in reported volume about one hour into the session with a wide range to the names on the tape.

However, DISH Network Corp.’s convertible notes were in focus after the company announced a $4 billion straight debt offering.

DISH’s 0% convertible notes due 2025 were up alongside stock early in the session.

The notes were changing hands at 109.5 versus an equity price of $38.04 early in the session. There was about $8 million in reported volume.

DISH’s 3.375% convertible notes due 2026 were changing hands at 99.75 versus a stock price of $37.97 early in the session. There was about $6 million in reported volume.

DISH’s stock was positive early in the session and traded as high as $38.29 before coming in alongside the broader market.

DISH’s stock was $37.61, a decrease of 0.67%, shortly before 11 a.m. ET.

DISH announced on Monday that it was selling $4 billion in senior secured notes to fund the purchase of wireless spectrum licenses and build out its wireless infrastructure as it prepares to become a mobile phone operator.

Outright and crossover accounts that hold DISH’s convertible notes were most likely selling to switch into the straight debt offering, a source said.

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