Convertibles secondary quiet amid volatility; Norwegian Cruise sinks; Sea, Zillow active

By Abigail W. Adams

Portland, Me., Feb. 14 – It was a quiet start to the week in the convertibles secondary space as equities struggled to find direction amid heightened geopolitical risks and the specter of rising rates.

Indexes wavered between gains and losses throughout the session as investors assessed the Ukrainian situation and continued hawkish comments from St. Louis Fed president James Bullard.

The Dow Jones industrial average remained in negative territory throughout the session but closed well off the lows of the day, ending down 172 points, or 0.49%.

The S&P 500 index briefly entered into positive territory before closing down 0.38%.

The Russell 2000 index was up about 0.70% early in the session but closed down 0.40% and the Nasdaq Composite rose almost 1% mid-session before closing the day flat at 13,790.

There was $61 million in reported volume about one hour into the session and $415 million on the tape less than one hour before the close.

NCL Corp. Ltd.’s new 2.5% exchangeable notes due 2027 for Norwegian Cruise Line Holdings Ltd.’s shares continued their downward spiral with the notes sinking further on an outright basis and contracting dollar-neutral.

Sea Ltd.’s 0.25% convertible notes due 2026 were active as the company’s equity sank double digits following more bad news for the company.

However, Zillow Group Inc.’s 0.75% convertible notes due 2024 continued their upward momentum with the notes gaining more than 17 points outright as stock continued to surge following last Friday’s earnings report.

Norwegian Cruise sinks

NCL’s 2.5% exchangeable notes due 2027 continued their downward spiral as stock continued to sink in heavy market conditions.

The notes were down to a 97-handle early in the session and were changing hands at 97.375 versus a stock price of $21.70.

They dropped to a 96-handle as the session progressed and were seen changing hands around 96.375 in the late afternoon, a source said.

While the notes were able to maintain a nominal dollar-neutral expansion on Friday, they contracted about 0.5 point on a dollar-neutral basis early Monday.

Norwegian Cruise’s stock wavered between positive and negative territory alongside the broader market.

Stock traded as high as $22.20 and as low as $20.91 before closing the day at $21.09, a decrease of 1.63%.

Sea active

Sea’s 0.25% convertible notes due 2026 were active as its equity again cratered double digits following the latest bad news for the company.

While the notes were lower outright, they were holding up well amid the volatility in equity.

The 0.25% notes fell about 3 points outright with stock off 18%.

The notes were changing hands at 82.375 versus a stock price of $129.81 in the late afternoon.

The notes were carrying a yield of 4.55%.

There was more than $14 million in reported volume heading into the market close.

Sea’s American Depositary Shares traded to a high of $139.70 and a low of $127.08 before closing the day at $129.17, a decrease of 18.39%.

The Singapore-based global consumer internet company’s equity tanked following reports that India had banned its most popular video game title in a crackdown on apps believed to have originated in China.

Zillow’s earnings

Zillow’s 0.75% convertible notes due 2024 continued their upward momentum as stock continued to surge following last Friday’s earnings report.

The short-duration notes rose another 8 points outright with stock up more than 10% in intraday activity.

The 0.75% notes were changing hands at 147 versus a stock price of $60.07 in the late afternoon.

There was about $14 million in reported volume heading into the close.

Zillow’s stock traded to a high of $61.31 and a low of $55.09 before closing the day at $58.07, an increase of 4.82%.

The 0.75% notes have risen about 17 points outright with stock up more than 25% since reporting earnings.

Zillow reported losses per share of $1.13, which was narrower than the losses per share of $1.22 expected.

Revenue was $3.88 billion, which beat analyst expectations for revenue of $3.29 billion.

Mentioned in this article:

Norwegian Cruise Line Holdings Ltd. NYSE: NCLH

Sea Ltd. NYSE: SE

Zillow Group Inc. Nasdaq: Z

© 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.