Morning Commentary: Convertibles secondary ‘dead as a doornail’ in early trading

By Abigail W. Adams

Portland, Me., Aug. 19 – It was “dead as a doornail” in the convertibles secondary space on Friday with few names on the tape and little movement in the names that did trade, a source said.

While equity markets were volatile due to options expirations, it had little impact on the convertibles secondary space.

The Dow Jones industrial average was down 250 points, or 0.47%, the S&P 500 index was down 1.2%, the Nasdaq Composite index was down 1.91% and the Russell 2000 index was down 2.03% shortly before 11 a.m. ET.

There was $21 million in reported volume early in the session with no name seeing more than $2 million in trade.

Intercept Pharmaceuticals Inc.’s 3.5% convertible notes due 2026 were among the most actively traded issues in the secondary space.

The notes were up 1.5 points outright with stock wavering between gains and losses early in the session.

The 3.5% notes were changing hands at 117.5 versus a stock price of $19.90 early in the session.

There was $2 million in reported volume.

Intercept’s stock was seen at $19.65, a decrease of 0.25%, shortly before 11 a.m. ET.

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