Morning Commentary: Ares Capital convertibles active as maturity approaches; Affirm down

By Abigail W. Adams

Portland, Me., Jan. 5 – The convertibles secondary space saw decent volume early in Wednesday’s session with equity markets mixed.

While the Dow Jones industrial average was positive early in Wednesday’s session, other benchmarks were flat to negative with the rout in growth stocks continuing.

The Dow Jones industrial average was up 112 points, or 0.3%, the Nasdaq Composite was down 0.85%, the S&P 500 index was down 0.09% and the Russell 2000 was down 0.04% shortly before 11 a.m. ET.

There was about $77 million reported convertible bond trading about one hour into the session.

Affirm Holdings Inc.’s 0% convertible notes due 2026 remained under pressure in active trading.

The 0% convertible notes were changing hands at 84.75 versus an equity price of $85.15 early in the session, according to a market source.

There was about $6 million in reported volume.

Affirm’s stock was changing hands at $82.46, a decrease of 3.45%, shortly before 11 a.m. ET.

Meanwhile, Ares Capital Corp.’s 3.75% convertible notes due Feb. 1, 2022 were active as the notes approach their maturity.

The 3.75% notes saw a large trade at 111.875 early in the session.

The trading level was just above parity, which was determined using the volume weighted average price of shares since Monday, a source said.

However, the averaging period for the notes will begin on Thursday and last through Jan. 27, which still gives the notes some optionality, the source said.

Ares Capital’s stock was changing hands at $20.96, a decrease of 1.27%, shortly before 11 a.m. ET.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.