Morning Commentary: RingCentral, NXP Semiconductors convertible notes active

By Abigail W. Adams

Portland, Me., July 30 – After a slow start to the week, there was an uptick of activity in the convertible secondary space on Tuesday with earnings related news pushing some outstanding issues into the spotlight.

While equities were weak at the start of Tuesday’s session, RingCentral Inc.’s convertible notes jumped on an outright basis as stock soared after a strong earnings report.

The 0% convertible notes due 2023 rose almost 20 points outright with stock up more than 14%.

However, the notes were moving more or less in line on a dollar-neutral basis, a market source said.

A high delta name, the notes trade with about 5 points of premium, the source said.

The 0% convertible notes were changing hands at 182.375 early in the session.

Stock traded up to $145.67, an increase of 15.47%.

RingCentral beat on both the top and bottom lines in its second-quarter earnings report. Stock was also trading up on stronger-than-expected guidance for the third quarter.

The communications software company announced second-quarter earnings of 21 cents versus analyst expectations for earnings of 16 cents.

Revenue was $215 million versus analyst expectations for earnings of $204.7 million.

The company also beat expectations with its third-quarter guidance for earnings per share of 19 cents on revenue of $221 million.

NXP Semiconductors NV’s 1% convertible notes due Dec. 1, 2019 were also in focus early in the session after reporting earnings.

The 1% convertible notes were down about 1 point outright. They were changing hands just shy of 107 with stock off slightly.

The notes were also moving more or less in line on a dollar-neutral basis, a source said.

Stock was $103.56, a decrease of 0.64%, shortly before 11 a.m. ET.

NXP reported earnings per share of 14 cents on revenue of $2.2 billion.

However, the semiconductor company gave a downbeat forecast for the third-quarter due to slowing demand and continued uncertainty regarding supplying Huawei Technologies, Bloomberg reported.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.