Morning Commentary: Convertibles trading quiet as equities drop; Beyond Meat retests lows

By Abigail W. Adams

Portland, Me., June 13 – It was a quiet morning in the convertibles secondary space as selling pressure continued in equities with the S&P 500 index officially entering and holding in bear market territory.

The Dow Jones industrial average was down 831 points, or 2.65%, the S&P 500 index was down 3.64%, the Nasdaq Composite index was down 4.33% and the Russell 2000 index was down 4.93% shortly before 11 a.m. ET.

The 10-year Treasury yield set a new multi-year high on Monday and was seen with a yield of 3.305% early in the session as the market reassessed its expectations for a rate hike schedule.

Few convertible bond names were in play early in Monday’s session with $34 million in reported volume about one hour into the session and no name seeing concentrated trading activity.

Beyond Meat Inc.’s distressed 0% convertible notes due 2027 continued to give back their gains to retest their lows.

The 0% convertible notes were down 2 points outright to change hands at 40 with the yield 20.25%.

While the notes were down day over day, they were holding above their lows, a source said.

The 0% notes traded down to 37 prior to the late May rally.

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