Pioneer Natural Resources convertibles in focus; Cytokinetics gains; Airbnb active

By Abigail W. Adams

Portland, Me., July 6 – It was another quiet day in the convertibles secondary space with equity markets volatile surrounding the release of the Federal Open Market Committee’s June minute notes.

Indexes were indecisive ahead of the release of the 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.

While indexes popped following the release of the minute notes, there was no repeat of the surge in buyers in May.

The Dow Jones industrial average, the S&P 500 index and the Nasdaq Composite index fought back from the red to close the day in positive territory with the Dow up 70 points, or 0.23%, the S&P 500 up 0.36% and the Nasdaq up 0.35%.

The Russell 2000 index remained negative and closed the day down 0.79% although it was well off the low of the day.

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

There was $59 million in reported convertibles trading volume about one hour after the opening bell and $333 million on the tape about one hour before the market close.

Pioneer Natural Resources Co.’s deep-in-the-money 0.25% convertible notes due 2025 dominated activity in the secondary space as the energy company’s stock pulled back alongside crude oil futures.

Airbnb Inc.’s 0% convertible notes due 2026 saw heavy volume although with little movement in price.

DISH Network Corp.’s 3.375% convertible notes due 2026 (B2/CCC) were also among the top traded issues during Wednesday’s session with the notes weaker.

Cytokinetics Inc.’s 3.5% convertible notes due 2027 continued their upward momentum in active trading.

Pioneer notes eyed

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 alongside crude oil futures.

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

The notes were changing hands at 204.25 versus a stock price of $209.69 in the late afternoon, according to a market source.

There was $31 million in reported volume.

The deep-in-the-money convertible notes were largely acting as an equity surrogate and moving in line with stock, a source said.

Pioneer’s stock traded to a high of $215.51 and a low of $203.83 before closing the day at $210.93, a decrease of 1.96%.

Stock was under pressure as crude oil futures continued their downward trend, settling at $98.39, a decrease of $1.15 or 1.16%.

Pioneer’s stock has dropped more than 25% over the past month amid volatility in energy futures.

Pioneer’s 0.25% convertible notes skyrocketed alongside crude oil futures following Russia’s invasion of Ukraine in late February.

The notes traded as high as 275 in early June.

The 0.25% notes have periodically dominated activity in the secondary space with some profit-taking in the name, sources said.

Airbnb active

Airbnb’s 0% convertible notes due 2026 saw heavy volume during Wednesday’s session although with little movement in price.

The 0% notes continued to trade on an 83-handle.

They were seen changing hands just shy of 83.5 versus a stock price of $92.75 in the late afternoon, according to a market source.

The notes were offering a yield of about 5%.

There was $15 million in reported volume.

Airbnb’s stock traded to a high of $96.17 and a low of $91.80 before closing the day at $92.88, a decrease of 3.19%.

DISH weaker

DISH’s 3.375% convertible notes due 2026 were among the top traded issues of Wednesday’s session with the notes weaker in the high-volume activity.

The 3.375% notes were marked at 66.75 bid, 67.75 offered in the late afternoon, a source said.

The yield was just shy of 14.25%.

There was $12 million in reported volume.

While not equity sensitive, DISH’s stock closed Wednesday at $18.12, a decrease of 1.84%.

Cytokinetics gains

Cytokinetics’ 3.5% convertible notes continued their upward momentum on Wednesday.

The 3.5% notes were up another 1.375 points outright with stock up 2% early in the session.

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

While active as stock spiked early, activity in the name petered out as stock came in as the session progressed.

There was $8 million in reported volume.

Cytokinetics’ stock traded to a high of $45.50 and a low of $42.93 before closing the day at $44.14, an increase of 0.55%.

Mentioned in this article:

Airbnb Inc. Nasdaq: ABNB

Cytokinetics Inc. Nasdaq: CYTK

DISH Network Corp. Nasdaq: DISH

Pioneer Natural Resources Co. NYSE: PXD

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