Morning Commentary: Liberty Media exchangeable notes reclaim par; Sea active

By Abigail W. Adams

Portland, Me., Sept. 14 – The convertibles primary market remained quiet early Thursday with the window of opportunity for new issuance drawing to a close.

The lack of new deal activity over the course of the week was a surprise to sources who had expected an active pace after the record-setting previous week.

However, there remains a robust calendar with a heavier pace of issuance expected in the coming weeks before the third quarter ends.

Meanwhile, the secondary space was quiet and flat early Thursday with equities strong at the start of the session.

The Dow Jones industrial average was up 230 points, or 0.67%, the S&P 500 index was up 0.65%, the Nasdaq Composite index was up 0.75% and the Russell 2000 index was up 1.10% shortly before 11 a.m. ET.

There was $60 million in reported volume about one hour into the session with few names seeing concentrated trading activity.

Amphastar Pharmaceuticals Inc.’s new 2% convertible notes due 2029, the sole deal to clear the primary market this week, was not active early in the session.

Liberty Media Corp.’s recently priced 2.375% exchangeable notes for Live Nation Entertainment Inc.’s stock saw renewed attention with the notes topping par for the first time since hitting the aftermarket.

The notes traded up 1 point outright with Live Nation’s stock up about 1.5%.

The notes were wrapped around 100.5 early in the session.

While improved outright, the notes were moving in line dollar-neutral, a source said.

Live Nation’s stock was trading at $83.91, an increase of 1.73%, shortly before 11 a.m. ET.

The 2.375% exchangeable notes have underperformed since hitting the aftermarket on Sept. 7 with the notes largely trading on a 99-handle and contracted dollar-neutral.

Sea Ltd.’s 0.25% convertible notes due 2026 saw the heaviest volume early in the session although with little movement in price.

The notes were trading around 79.5 with the yield about 8.125% early in the session, a source said.

There was $8 million in reported volume.

The high-premium notes are not equity sensitive and trade largely for their yield.

However, Sea’s American Depositary Shares were changing hands at $39.94, an increase of 2.33%, shortly before 11 a.m. ET.

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