Akamai convertible notes break par; NextEra, Insmed paper active; Coinbase gains

By Abigail W. Adams

Portland, Me., Aug. 29 – It was another quiet day in the convertibles secondary space on Tuesday although there was an uptick of activity compared to the previous session as equity indexes extended their gains on the heels of an unexpectedly weak JOLTs report.

Equity indexes surged and Treasury yields slumped following fresh labor data that reported 8.83 million job openings, a multi-year low and a figure that came in well below forecasts.

The Dow Jones industrial average closed Tuesday up 293 points, or 0.85%, the S&P 500 index closed up 1.45%, the Nasdaq Composite index closed up 1.74% and the Russell 2000 index closed up 1.42%.

The market was dialing back its bets on future Fed rate increases in 2023, a source said.

But while the secondary space was strong on Tuesday, few names saw concentrated trading activity with portfolio balancing and prepositioning driving activity in a broad range of issues.

There was $48 million in reported volume about one hour into the session and $350 million on the tape about one hour before the market close.

Akamai Technologies Inc.’s recently priced 1.125% convertible notes due 2029 were among the most actively traded issues of the session with the notes breaking par for the first time since hitting the secondary space.

NextEra Energy Partners LP’s short-duration 0% convertible notes due June 15, 2024 saw some action although with little movement in price.

Insmed Inc.’s 0.75% convertibles due 2028 also saw a flurry of trades although with little movement in price.

Coinbase Global, Inc.’s 0.5% convertible notes due 2026 were among the major gainers of Tuesday’s session with crypto-exposed stocks on fire following a legal victory that could pave the way for Bitcoin ETFs.

Akamai breaks par

Akamai’s 1.125% convertible notes due 2029 were active on Tuesday with the notes breaking par for the first time since hitting the secondary space on Aug. 16.

The notes were trading just shy of par early in the session and were marked at 99.875 versus a stock price of $103 early in the session, according to a market source.

They continued to gain alongside stock and were changing hands at 100.25 versus a stock price of $103.92 in the late afternoon.

There was $10 million in reported volume.

While strongly higher outright, the notes were largely flat dollar-neutral, a source said.

Akamai’s stock traded to a low of $103.03 before closing the day at the intersession high of $104.40, an increase of 1.14%.

Akamai’s convertible notes have made steady outright gains over the past three sessions after trading to a 98-handle late last week.

The secondary performance of the notes was a disappointment to many with the notes flat to contracted dollar-neutral, a product of their tight pricing.

NextEra active

NextEra’s short-duration 0% convertible notes due June 15, 2024 were active although with little movement in price.

The 0% notes were wrapped around 95 in the late afternoon with the yield about 6.6%, according to a market source.

There was $10 million in reported volume.

The notes are far out-of-the-money and have little to no call optionality, a source said.

They largely trade for their yield, which still offered a decent premium to one-year Treasury bills.

While not equity sensitive, Tuesday marked a strong session for NextEra’s stock, which closed at $50.69, an increase of 4.26%.

Insmed active

Insmed’s 0.75% convertibles due 2028 saw a flurry of activity on Tuesday although with little movement in price.

While there were some odd-lot trades of the notes as low as 86, the market for the notes remained on an 88-handle.

The notes were changing hands at 88.125 versus a stock price of $21.74 in the late afternoon, according to a market source.

There was $9 million of the notes on the tape.

Insmed’s stock traded to a low of $21.21 and a high of $21.81 before closing at $21.61, off 0.046%.

Coinbase gains

Coinbase’s 0.5% convertible notes due 2026 made large gains in active trade on the heels of Grayscale’s victorious lawsuit against the Securities and Exchange Commission, which could pave the way for Bitcoin ETFs.

The 0.5% notes, which move on a light delta, rose almost 2 points outright with stock up more than 14%.

They were changing hands at 76.625 versus a stock price of $85.44 in the late afternoon, according to a market source.

There was $9 million in reported volume.

Coinbase’s stock traded to a low of $73.17 and a high of $86.26 before closing at $84.70, an increase of 14.91%.

They crypto-exchange’s stock was on fire alongside the sector following news that Grayscale had won its lawsuit against the Securities and Exchange Commission for denying the company’s application to convert its Bitcoin Trust into an ETF.

The verdict could pave the way for SEC approval of a flurry of Bitcoin ETF applications that are undergoing the SEC approval process.

Mentioned in this article:

Akamai Technologies Inc. Nasdaq: AKAM

Coinbase Global, Inc. Nasdaq: COIN

Insmed Inc. Nasdaq: INSM

NextEra Energy Partners LP NYSE: NEP

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.