Morning Commentary: American Water exchangeables active, trade lower with stock

By Abigail W. Adams

Portland, Me., June 28 – The convertibles primary market remained dormant early Wednesday with the window of opportunity for new deals to launch before the end of the quarter narrowing.

While a backlog of deals remains in the pipeline, earnings season blackouts are expected to put a damper on primary market activity until mid-July.

Meanwhile, the one deal to price in the past week continued to dominate activity in the secondary space.

American Water Capital Corp.’s 3.625% exchangeable notes due 2026 (Baa1/A-) were lower alongside stock in early trade.

The 3.625% notes were changing hands at 100.375 versus a stock price of $141.77 early in the session, according to a market source.

There notes accounted for $51 million of the $113 million in reported volume on the tape about one hour into the session.

American Water’s stock was trading at $141.50, a decrease of 1.27%, shortly before 11 a.m. ET.

The new paper put in a solid performance on its aftermarket debut on Tuesday with the notes expanding 0.25 point dollar-neutral.

Outside of the new paper, the secondary space was quiet early Wednesday with equity indexes mixed after the strong gains of the previous session.

The Dow Jones industrial average was down 157 points, or 0.48%, the S&P 500 index was down 0.08%, the Nasdaq Composite index was up 0.44% and the Russell 2000 index was up 0.13% shortly before 11 a.m. ET.

© 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.