Morning Commentary: Convertibles market awaits Apptio; secondary trading volume light

By Abigail W. Adams

Portland, Me., March 20 – As the primary market prepares a new deal from Apptio Inc., trading volume remained light in the convertibles secondary market early in Tuesday’s session.

Apptio plans to price $125 million of five-year convertible notes after the market close Tuesday with price talk for a coupon of 0.875% to 1.375% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

The offering from the Bellevue, Wash.-based technology business management software company is small, but new issuances have been healthy in 2018, a market source said.

While there has been a solid influx of new paper into the market, recent deals were slow to trade on Tuesday.

“There’s nothing really trading,” a market source said. “It’s really dead right now.” Only about $87 million was on the tape early in the session.

After ending Monday below par, Zendesk Inc.’s recently priced 0.25% convertible notes due 2023 traded just north of par in a single trade early in Tuesday’s session with stock up about 1%.

Live Nation Entertainment Inc.’s 2.5% convertible notes due 2023 remained just south of 102 in a single trade early Tuesday with stock up about 0.62%.

The Dow Jones industrial average was up about 0.5% early on Tuesday after a tumultuous day in equities on Monday. “There’s not much doing today,” the source said.

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