Morning Commentary: Nova convertibles in focus; Cutera, InterDigital come in outright

By Abigail W. Adams

Portland, Me., May 26 – It was a relatively quiet morning in the convertibles secondary space as equity markets extended their gains from the previous session.

The Dow Jones industrial average was up 484 points, or 1.51%, the S&P 500 index was up 1.75%, the Nasdaq Composite index was up 2.17% and the Russell 2000 index was up 2.10% shortly before 11 a.m. ET.

There was $63 million in reported volume about one hour into the session with a small, illiquid issue that rarely trades in volume dominating the tape.

Nova Measuring Instruments Ltd.’s deep-in-the-money 0% convertible notes due 2025 were in focus in early trading.

The notes were changing hands at 144.75 versus a stock price of $100.80 early in the session, according to a market source.

There was $9 million in reported volume.

The issue has been largely tucked away with the last round lot trade in the notes on March 31 when they changed hands at 156.875.

The Israel-based semiconductor parts supplier’s American Depositary Shares opened the day with losses but climbed alongside broader markets to trade at $103.47, an increase of 2.53%, shortly before 11 a.m. ET.

While several companies in the semiconductor sector shook off a weak open, Nividia Corp.’s weak forward guidance cast a cloud over the industry.

Companies are starting to address their convertible notes with short-term maturities with the two deals to price over the course of the week coming as refinancings.

Cutera Inc.’s 2.25% convertible notes due 2028 and InterDigital, Inc.’s 3.5% convertible notes due 2027 remained active with the notes giving back some outright gains in early trading.

Cutera’s 2.25% notes were down about 0.5 point outright with stock off about 0.4%.

The notes were trading just shy of 103 versus a stock price of $43.05 early in the session.

There was $4 million in reported volume.

Cutera’s stock was changing hands at $43.41, a decrease of 0.41%, shortly before 11 a.m. ET.

InterDigital’s 3.5% convertible notes due 2027 were down about 0.625 point outright to change hands at 101 early in the session.

There was $4 million in reported volume.

InterDigital’s stock was $61.51, an increase of 2.11%, shortly before 11 a.m. ET.

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