Morning Commentary: Ares Capital continues to dominate trading; biotech tape strong

By Abigail W. Adams

Portland, Me., Jan. 7 – The convertibles secondary space opened Monday with above average trading volume. About $92 million was on the tape less than an hour into the session with one name accounting for more than 25% of the total trading volume – Ares Capital Corp.

The convertible notes from the specialty finance firm have seen heavy trading volume since last week with one issue quickly approaching maturity.

Ares Capital’s 4.375% convertible notes due Jan. 15, 2019 saw more than $15 million of the bonds on the tape. They continued to change hands at around par, a market source said.

Ares Capital’s 3.75% convertible notes due 2022 were also active with more than $14 million of the bonds on the tape. The notes were also trading around par.

The trading activity was attributed to holders switching from the soon-to-mature notes to the longer-dated paper, which is investment grade.

While slow to trade early in Monday’s session, the tape was strong for biotech companies on Monday.

Insmed Inc.’s 1.75% convertible notes due 2025 jumped almost 10 points outright to 83.25 in a single $1 million-plus trade early in Monday’s session, a market source said.

Insmed stock was up to $20.26, an increase of 36.43%, early in Monday’s session.

Stock soared after Insmed announced preliminary sales figures for its recently approved drug Arikayce to treat a rare lung disease.

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