Morning Commentary: Live Nation convertibles in focus as DOJ readies antitrust suit

By Abigail W. Adams

Portland, Me., April 16 – It was another quiet start to the day in the convertibles secondary space as equity indexes wavered between gains and losses as markets await further clarity on the Fed’s rate cut intentions.

The slew of macro data from the previous week sparked a dramatic repricing in markets with a June rate cut now considered off the table and the number of rate cuts to expect in 2024 a question mark.

Federal Reserve chair Jerome Powell is scheduled to speak in the afternoon with his comments to be closely monitored.

Equity indexes were mixed with Treasury yields creeping higher as markets await Powell’s comments.

The Dow Jones industrial average was up 48 points, or 0.13%, the S&P 500 index was down 0.32%, the Nasdaq Composite index was down 0.22% and the Russell 2000 index was down 1.10% shortly before 11 a.m. ET.

There was $71 million in reported volume about one hour into the session with few names seeing concentrated activity.

However, topical news continued to spark large price movements in the space.

Live Nation Entertainment, Inc.’s convertible notes were active and lower with stock on headlines that the Department of Justice was preparing an antitrust suit against the entertainment company.

Live Nation’s 3.125% convertible notes due 2029 were off 5 points outright with stock down more than 6% in early trade.

The 3.125% notes were trading at 110.625 versus a stock price of $93 early in the session, according to a market source.

Live Nation’s 2% convertible notes due 2025 were off 3.5 points outright to trade at 104 early in the session.

Both tranches saw about $3 million in reported volume.

Live Nation’s stock was trading at $93.58, a decrease of 6.20%, shortly before 11 a.m. ET.

The Department of Justice has been probing Live Nation’s business practices since 2022 with the Wall Street Journal reporting post-close Monday that the agency was preparing to file an antitrust suit as early as May.

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