Morning Commentary: Western Digital convertible notes active on otherwise quiet morning

By Abigail W. Adams

Portland, Me., Dec. 22 – It was a relatively quiet start to the day in the convertible bond market on Wednesday as market players prepare to close their books on a turbulent year.

Equities stood poised to extend their gains from Tuesday’s rally with the Dow Jones industrial average up 150 points, or 0.42%, the S&P 500 index up 0.56% and the Nasdaq Composite up 0.55% shortly before 11 a.m. ET.

However, the Russell 2000 index wavered between positive and negative territory and was largely flat early in the session.

There was $73 million in reported convertible bond trading volume about one hour into the session.

However, Western Digital Corp.’s 1.5% convertible notes due 2024 accounted for more than 25% of the total volume on the tape.

The 1.5% convertible notes were largely unchanged and continued to trade around 100.375 with a yield of 1.318%.

There was $18.5 million in reported volume.

While Western Digital’s stock was positive early in Wednesday’s session, the convertible notes trade for their yield, a source said.

The activity in the name was a cash alternative trade with holders adjusting their portfolio.

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