Convertibles trading grinds to a halt; Ares Capital active; Acorda flat after exchange

By Abigail W. Adams

Portland, Me., Dec. 24 – Markets were grinding tighter throughout December. However, they ground to a halt on Christmas Eve, and the convertibles secondary space was no exception.

There was approximately $7 million in reported volume on the tape about one hour into Tuesday’s session and $31 million shortly before the market’s early close.

“There is absolutely nothing going on,” a market source said.

The lack of activity in the space was echoed by other sources.

Ares Capital Corp.’s convertible notes were among the few issues to see some volume during Tuesday’s session.

The specialty finance firm’s 3.75% convertible notes due 2022 were changing hands between 103.25 and 103.5.

With over $4 million on the tape shortly before the market close, the 3.75% convertible notes were among the volume leaders of Tuesday’s session.

Ares Capital’s stock closed Tuesday at $18.58, an increase of 0.22%.

Ares Capital’s convertible notes have been active throughout December as outright accounts cashed in on a stellar year for the convertibles market with returns broaching 20%, sources said.

Acorda Therapeutics Inc.’s 1.75% convertible notes due 2021 were one of the few names to make an appearance on the tape.

The notes were largely unchanged at 75.5, a market source said.

The company announced an exchange for $276 million of the 1.75% convertible notes for approximately $207 million of new 6% convertible notes due 2024 on Monday, Prospect News reported.

The 6% notes have not been active in the secondary space since the exchange, a source said.

Holders who participated in the exchange were given $750 principal amount of the new 6% notes and a cash payment of $200 per $1,000 principal amount of old notes.

Acorda has long been rumored to be a takeover subject. However, the exchange squashed that speculation, a source said.

The biopharmaceutical company issued $345 million of the 1.75% convertible notes at par in June 2014.

Acorda stock was $32.12 when the 1.75% convertible notes were priced.

Stock closed Tuesday at $1.92, an increase of 7.87%.

Mentioned in this article:

Acorda Therapeutics Inc. Nasdaq: ACOR

Ares Capital Corp. Nasdaq: ARCC

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