Morning Commentary: Twitter convertible notes active early on otherwise quiet morning

By Abigail W. Adams

Portland, Me., April 22 – It was a quiet morning in the convertibles secondary space on Friday as equity markets extended declines.

The Dow Jones industrial average was down 514 points, or 0.88%, the S&P 500 index was down 1.34%, the Nasdaq Composite index was down 0.87% and the Russell 2000 index was down 1.29% shortly before 11 a.m. ET.

While the Federal Reserve’s rate hike schedule has made investors nervous with an enormous increase on the horizon, holders of convertible notes were holding tight with the pressure in equities not yet translating into selling activity in the space, a source said.

Twitter Inc.’s 0% convertible notes due 2026 were active on an otherwise quiet morning.

The notes were slightly better in early trading, a source said.

The convertibles were changing hands at 91.375 early in the session.

The notes were moving in line to slightly improved on a dollar-neutral, or hedged, basis.

Twitter’s stock was trading at $49.18, an increase of 4.46%, shortly before 11 a.m. ET.

Twitter’s convertible notes have been in focus since Tesla Inc. CEO disclosed his stake in the company and launched a hostile takeover bid.

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