Morning Commentary: Southwest Airlines convertibles active on otherwise quiet morning

By Abigail W. Adams

Portland, Me., Jan. 3 – It was a quiet start to the day in the convertibles secondary space with little on the tape as market players set their sights on the New Year.

After wavering early in the session, equity markets turned positive with the Dow Jones industrial average up 88 points, or 0.24%, the Nasdaq Composite up 0.79%, the S&P 500 index up 0.29% and the Russell 2000 index up 1.67% shortly before 11 a.m. ET.

The convertible bond market saw $43 million in reported volume about one hour into the session with few names seeing concentrated trading activity.

Southwest Airlines Co.’s 1.25% convertibles due 2025 (Baa1/BBB) saw the heaviest volume early in the session although with little price movement.

The notes were changing hands at 134.25 versus an equity price of $43.13 early in the session, according to a market source.

There was $6.5 million in reported volume.

Southwest Airlines’ stock was changing hands at $43.82, an increase of 2.31%, shortly before 11 a.m. ET.

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