Morning Commentary: Pioneer Natural Resources convertibles dominate the tape early

By Abigail W. Adams

Portland, Me., May 5 – The convertibles secondary space was active early Thursday as equity markets gave back their gains from Wednesday’s late-day rally.

The Dow Jones industrial average was down 887 points, or 2.61%, the S&P 500 index was down 3.04%, the Nasdaq Composite index was down 4.23% and the Russell 2000 index was down 3.46% shortly before 11 a.m. ET.

There was $90 million in reported volume about one hour into the session with one name accounting for nearly ¼ of the trading volume.

Pioneer Natural Resources Co.’s deep-in-the-money 0.25% convertible notes due 2025 were in focus following the oil and gas company’s earnings report.

The 0.25% notes rose about 7 points outright and were changing hands at 243.75 versus a stock price of $258.80 early in the session, according to a market source.

There was $21 million in reported volume.

Pioneer Natural Resources’ stock was trading at $254.97, an increase of 0.87%, shortly before 11 a.m. ET.

Pioneer bested expectations in its first-quarter earnings report with earnings per share of $7.74 versus analyst expectations for earnings of $7.36. Revenue was $6.17 billion versus the $5.99 billion expected.

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