Booking Holdings, Twitter convertibles active; Tesla up again; Oasis Petroleum gains

By Abigail W. Adams

Portland, Me., Jan. 6 – The convertibles secondary space launched the week quietly with all eyes on the primary market to see what the new year will bring for new deal activity.

It is widely believed that the Jan. 6 week will be an active one for the primary market with opportunistic issuers taking advantage of attractive market conditions before the earnings season blackout begins.

The new paper will be welcome in the secondary space, which was starting to look rich, a market source said.

However, no deals were announced on Monday with many bankers still on holiday, a market source said.

There was $52 million on the tape about one hour into Monday’s session and $312 million in reported volume in the late afternoon.

However, it was the usual suspects on the tape.

Booking Holdings Inc.’s convertible notes continued to see heavy volume with the maturity of the notes closing in.

Twitter Inc.’s 0.25% convertible notes due 2024 were active although with little movement in price.

Tesla Inc.’s convertible notes continued to improve as stock again broke out to a new 52-week high.

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

Volume movers

Booking Holdings’ convertible notes again saw heavy volume on Monday after topping the volume charts on Friday.

Holders appeared to be switching from the shorter duration notes to the longer duration notes.

However, both tranches have quickly approaching maturities with the shorter duration tranche due in June and the longer duration tranche due in about 1.5 years.

Booking’s 0.35% convertible notes due on June 15, 2020 were changing hands at about 155.375 on Monday. The 0.9% convertible notes due Sept. 15, 2021 were changing hands at 116.

Booking’s stock closed Monday at $2,047.40, a decrease of 0.88%.

Twitter’s 0.25% convertible notes due 2024 were also active although the notes were largely moving sideways.

The 0.25% convertible notes were changing hands at 96.625 Monday afternoon.

Twitter stock was off shortly after the opening bell and traded as low as $31.16 before rebounding to close the day at $31.64, an increase of 0.38%.

Tesla up again

Tesla’s convertible notes continued to improve on Monday as stock again broke out to a new 52-week high.

“It’s unbelievable,” a market source said.

The convertible notes were up another 0.25 point on a dollar-neutral, or hedged, basis on Monday after posting steady gains throughout last week.

The 2% convertible notes due 2024 were the most active of the tranches on Monday with the notes trading up to 160.5.

The 1.25% convertible notes due 2021 traded just shy of 134 in the late afternoon.

The 2.375% convertible notes due 2022 traded up to 150.25 in the late afternoon.

Tesla stock traded as low as $440.00 before closing the day at $451.54, an increase of 1.93%.

The stock’s upward trajectory was further supported by better-than-expected fourth-quarter delivery numbers announced late last week.

Oasis Petroleum gains

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

The 2.625% convertible notes were changing hands just shy of 80 early in the session, a source said. There were some odd lot trades as high as 83 later in the afternoon.

The notes were trading on a 76 handle at the start of the new year, according to Trace data.

Escalating tensions between the United States and Iran put a damper on equity markets’ strong start to 2020. While down early in Monday’s session, equities rebounded to close the day largely flat.

While equity markets in general took a hit following the air strike in Iraq that killed a senior Iranian military commander, the energy sector benefitted with oil futures on the rise.

While the barrel price of WTI crude oil for February delivery continued its upward momentum early in Monday’s session, those gains were lost as the session progressed.

After briefly dipping into the red in intraday trading, crude oil futures settled at $63.27, an increase of 22 cents, or 0.36%.

Mentioned in this article:

Booking Holdings Inc. Nasdaq: BKNG

Oasis Petroleum Inc. Nasdaq: OAS

Tesla Inc. Nasdaq: TSLA

Twitter Inc. NYSE: TWTR

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