Bill.com convertibles drop post-earnings; Booking notes active; Integer adds outright

By Abigail W. Adams

Portland, Me., Feb. 3 – The convertibles secondary space remained active on Friday as the intense rally in tech and growth stocks over the past two sessions came to an end.

While credit and equity markets surged on the back of a dovish tilt in Federal Reserve chair Jerome Powell’s statements on Wednesday, Friday’s release of the U.S. non-farm payrolls report dampened market optimism about a pause in rate hikes.

The unexpected surge in hiring in January, which pushed unemployment rates to a 53-year low, cast doubt on a market convinced two days prior that the Federal Reserve’s rate hike campaign had largely run its course.

Equity indexes launched Friday’s session deep in the red, briefly turned positive in intraday activity, but returned to negative territory to close near the lows of the day.

The Dow Jones industrial average closed Friday down 174 points, or 0.51%, the S&P 500 index closed down 1.12%, the Nasdaq Composite index closed down 1.62% and the Russell 2000 index closed down 0.67%.

There was $117 million in reported volume about one hour into the session and $561 million on the tape about one hour before the market close.

Bill.com Holdings Inc. was the name of the day with its convertible notes under pressure as stock dived double digits post-earnings.

Booking Holdings Inc.’s 0.75% convertible notes due 2025 (A3/A-) also saw heavy volume with the issue set to be dropped from the Refinitiv convertible indices.

Integer Holdings Corp.’s 2.125% convertible notes due 2028 continued to add to the large gains made since hitting the secondary space on Wednesday.

Bill.com’s earnings

Bill.com’s convertible notes were in focus on Friday with the notes falling outright and contracting dollar-neutral as stock dived in response to earnings.

Bill.com’s 0% convertible notes due 2025 fell 12 points outright with stock off more than 25%.

The notes were changing hands at 100.5 versus a stock price of $99.55 about one hour into the session, according to a market source.

By late afternoon, they were seen at 99.125 versus a stock price of $96.41.

The notes contracted about 0.5 point dollar-neutral on the move downward, a source said.

There was $43 million in reported volume.

Bill.com’s 0% convertible notes due 2027 were down 3 points outright.

The notes were seen at 79.5 versus a stock price of $99.16 early in the session.

They continued to trade around 79.5 as stock continued to fall in the afternoon.

There was $11 million in reported volume.

Bill.com’s stock traded to a low of $91 and a high of $103.60 before closing at $94.51, a decrease of 26.80%.

Stock tanked despite a large earnings beat with the accounting software company reporting earnings per share of 42 cents versus analyst expectations of 20 cents and revenue of $260 million versus analyst expectations for revenue of $245 million.

However, weak guidance sparked a sell-off in the stock.

Index trade

Booking Holdings’ 0.75% convertible notes due 2025 were major volume movers on Friday with the notes soon to be dropped from the Refinitiv convertible indices.

The 0.75% notes were largely unchanged in heavy volume.

The notes were trading at 144.25 in the late afternoon.

There was $40 million in reported volume.

Booking’s stock traded to a high of $2,472.22 and a low of $2,409.88 before closing the day at $2,455.07, an increase of 0.015%.

The convertible notes are set to be dropped from the indices on Feb. 8.

Integer adds

Integer’s 2.125% convertible notes due 2028 continued to add in heavy volume on Friday with the notes trading higher alongside stock in intraday activity.

The convertible notes gained another 0.5 point outright.

They were trading at 108.75 versus a stock price of $74.64 in the late afternoon.

There was $12 million in reported volume.

Integer’s stock was positive for most of Friday’s session but was dragged into negative territory as selling accelerated in the late afternoon.

Stock traded to a high of $75.17 and a low of $72.96 before closing the day at $73.50, a decrease of 0.66%.

The notes have made strong gains since hitting the secondary space on Wednesday.

Mentioned in this article:

Bill.com Holdings Inc. NYSE: BILL

Booking Holdings Inc. Nasdaq: BKNG

Integer Holdings Corp. NYSE: ITGR

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