Morning Commentary: Convertible secondary starts week quietly; Oasis Petroleum gains

By Abigail W. Adams

Portland, Me., Jan. 6 – The convertibles secondary space launched the week quietly. While there was decent volume on the tape, few names saw concentrated trading activity, a market source said.

There was about $52 million on the tape about one hour into the session with few names seeing more than $3 million in reported volume.

Twitter Inc.’s 0.25% convertible notes due 2024 were among the most actively traded issue in the secondary space with $3 million in reported volume, according to a market source.

The notes were changing hands at 96.

Twitter stock was off shortly after the opening bell and traded as low as $31.16 before rebounding. Stock was largely flat at $31.55, an increase of 0.16%, shortly before 11 a.m. ET.

While escalating tensions between the United States and Iran again dragged down equities on Monday, the energy sector continued to benefit with crude oil futures again on the rise.

Oasis Petroleum Inc.’s 2.625% convertible notes due 2023 made an appearance on the tape with the notes making gains.

The 2.625% convertible notes were changing hands just shy of 80 early in the session with about $2 million in reported volume, a source said.

The notes were trading on a 76 handle at the start of the new year.

The barrel price of WTI crude oil for February delivery continued its upward momentum early in Monday’s session and traded up to $63.33, an increase of 28 cents, or 0.44%, shortly before 11 a.m. ET.

The Dec. 6 week is widely believed to be an active one for new deal activity with opportunistic issuers taking advantage of attractive market conditions before the earnings season blackout begins.

However, with equity markets weak in the face of escalating tensions between the U.S. and Iran, it remains to be seen whether it will put a damper on primary market activity.

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