Morning Commentary: Convertibles quiet as health care vote looms; FireEye adds outright

By Rebecca Melvin

New York, March 23 – U.S. convertibles were quiet early Thursday as market players eyed Washington and the jockeying occurring among lawmakers and the Trump Administration ahead of a Congressional vote on the Republican’s health care bill.

“There’s nothing going on; it’s really quiet,” a New York-based sellsider said.

After the vote, trading was expected to pick up, he said. Either financial markets will “rip” higher if the bill passes or they will tank if the bill is voted down, he said.

Despite the overall quiet tone, there was some trading of FireEye Inc.’s duo of convertible bonds in the convert space after Goldman Sachs upgraded the equity rating of the Milpitas, Calif.-based cybersecurity firm to “buy” from “sell.” The bank downgraded Proofpoint Inc., the Sunnyvale, Calif.-based internet security services vendor, at the same time.

FireEye’s 1.625% convertibles due 2035 traded at about 90, which was up 0.75 point to a point on an outright basis, a sellsider said, as the company’s common stock that underlies the bonds jumped 90 cents, or 8%, to $12.38.

The FireEye 1% convertible notes due 2035 traded at 93.6, according to Trace data, which was little changed to higher.

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