Post-holiday convertible bond trading subdued; Intercept’s new issue lower; Akamai gains

By Stephanie N. Rotondo

Seattle, July 5 – After rising on Friday, the convertible bond market came back after the long holiday weekend to a weaker tone.

“The way Europe was down, we were going to be down regardless,” a trader said. The Dow Jones industrial average traded down over 100 points on Tuesday. The S&P 500 index and the Nasdaq Global Select Market also ended lower.

The day’s declines came as European stocks got hammered. Investors there pushed down the market as concerns about slowing economic growth – especially amid the United Kingdom’s election to leave the European Union – grew.

But given the weakness – and the fact that it was July 5 – liquidity in the convertibles space was limited.

“July 5 is always a dead day,” one trader said. “People take this week off.”

The trader pointed out that even Intercept Pharmaceuticals Inc.’s $400 million of 3.25% convertible notes due 2023 were not moving much.

The notes ended in a 103.375 to 103.875 context, off half a point to a full point.

The equity was off $2.89, or 1.97%, at $143.47.

Away from the new-ish deal, Akamai Technologies Inc.’s 0% convertible notes due 2019 were unchanged to slightly better, even as the equity declined.

The notes closed at 98.875 bid, 98.375 offered. The stock meantime ended at $54.25, off $1.25, or 2.25%.

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