Morning Commentary: Pioneer Resources convertibles in focus; Cytokinetics adds to gains

By Abigail W. Adams

Portland, Me., July 6 – It was another quiet morning in the convertibles secondary space as equity markets struggled to find direction.

Indexes were indecisive ahead of the release of the Federal Open Market Committee’s June minute notes with the late May rally that was sparked by the dovish tone in the Federal Reserve’s previous meeting notes fresh in mind.

The Dow Jones industrial average was down 36 points, or 0.12%, the S&P 500 index was down 0.12%, the Nasdaq Composite index was up 0.05% and the Russell 2000 index was down 1.05% shortly before 11 a.m. ET.

While equity markets remained volatile, few were making moves in the secondary space, a source said.

There was $59 million in reported convertibles trading volume about one hour after the opening bell with two issues accounting for almost one half of the names on Trace – Cytokinetics Inc.’s 3.5% convertible notes due 2027 and Pioneer Natural Resources Co.’s deep-in-the-money 0.25% convertible notes due 2025.

Cytokinetics’ 3.5% convertible notes continued to gain outright alongside stock in heavy volume.

The 3.5% notes were up another 1.375 points outright with stock up 2%.

They were changing hands just shy of 110 versus a stock price of $44.49, according to a market source.

There was $7 million in reported volume.

Cytokinetics’ stock was trading at $44.56, an increase of 1.5%, shortly before 11 a.m. ET.

Pioneer Natural Resources’ 0.25% convertible notes due 2025 continued to see heavy volume with the notes lower as the oil and gas company’s stock continued to come in as crude oil futures continued their downward trend.

The 0.25% convertible notes were seen at 204.625 versus a stock price of $211.71 early in the session.

There was $17.5 million in reported volume.

Pioneer’s stock was changing hands at $204.36, a decrease of 5.01%, shortly before 11 a.m. ET.

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