Morning Commentary: Intel, Aerojet convertibles active; Pandora improves

By Abigail W. Adams

Portland, Me., Jan. 22 – The convertible secondary space opened Tuesday with decent trading volume. However, few names saw concentrated trading activity, according to a market source.

There was about $70 million on the tape early in Tuesday’s session. Intel Corp.’s 3.25% convertible notes due 2039 were among the most actively traded in the secondary space with a large seller in the market, a market source said.

The notes were changing hands at 237.375 with more than $5 million on the tape. The notes were essentially an equity surrogate, a market source said.

Intel stock was trading hands at $48.41, a decrease of 1.59%, shortly before 11 a.m. ET.

Aerojet Rocketdyne Holdings, Inc.’s 2.25% convertible notes due 2023, an issue not normally seen on the tape, were also active with the notes changing hands just shy of 159. Aerojet stock was off slightly early in Tuesday’s session and traded down to $38.50, a decrease of 0.46%.

Pandora Media Inc.’s 1.75% convertible notes due 2020 were making gains on an outright basis after Sirius XM Holdings Inc. launched consent solicitations related to its acquisition of the music streaming service.

The 1.75% convertible notes rose 1.5 points outright to 96.5, according to a market source.

Pandora stock was trading down early in Tuesday’s session. Stock was $8.45, a decrease of 2.65%, shortly before 11 a.m. ET.

Sirius announced Friday that it was seeking consent to amend the indentures governing the convertible notes to enable the merger.

Sirius has secured the consent of a beneficial owner of $60 million of the convertibles, or 39.5% of the principal amount of the 1.75% notes due 2020, Prospect News reported.

Sirius will guarantee the payment of the convertible notes following the acquisition.

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