Morning Commentary: Rivian convertible notes level off after strong gains

By Abigail W. Adams

Portland, Me., Dec. 15 – The convertible bond secondary space remained active on Friday with the market continuing to ride the post-Fed rally that pushed secondary returns to their height of the year.

Equity indexes were mixed early Friday after surging over the past two sessions with the small cap index the outperformer.

The Dow Jones industrial average was down 26 points, or 0.07%, the S&P 500 index was up 0.04%, the Nasdaq Composite index was up 0.52% and the Russell 2000 index was down 0.21% shortly before 11 a.m. ET.

While equities took a breather on Friday, the secondary space remained firm with buyers continuing to lift the market.

There was $132 million in reported volume about one hour into the session with a wide breadth of names in play.

Rivian Automotive Inc.’s convertible notes remained active with the notes leveling off after jumping alongside stock the previous session.

The 4.625% convertible notes due 2029 were changing hands at 133.5 versus a stock price of $22.10 early in the session, according to a market source.

There was $6 million in reported volume.

The 3.625% convertible notes due 2030 were changing hands at 119.25 versus a stock price of $22.40.

There was $5 million in reported volume.

Rivian stock was trading at $22.64, an increase of 0.94%.

The 4.625% convertible notes shot up 10 points outright and the 3.625% convertible notes due 2030 surged 11 points outright as Rivian stock added 14%.

Stock surged after the company announced a new partnership with AT&T, which will be using Rivian electric vans in the coming year.

Rivian previously had an exclusivity agreement with Amazon which came to an end in November.

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