Duke, PPL, Southern Co. convertibles dominate trading; DISH active, hovers near lows

By Abigail W. Adams

Portland, Me., April 24 – It was a slow start to the week for the convertibles primary and secondary markets with no new deals announced and the secondary space quiet and flat as indecision continued to flatline broader markets.

Equity indexes were again either side of unchanged following last week’s largely sideways price movement.

The Dow Jones industrial average closed Monday up 66 points, or 0.20%, the S&P 500 index closed up 0.09%, the Nasdaq Composite index closed down 0.29% and the Russell 2000 index closed down 0.15%.

There was $42 million in reported volume about one hour into the session and $324 million on the tape about one hour before the close.

Investment-grade issues continued to dominate the tape with Duke Energy Corp.’s 4.125% convertible notes due 2026 (Baa2/BBB), Southern Co.’s 3.875% convertible notes due 2025 (Baa2/BBB) and PPL Corp.’s 2.875% exchangeable notes due 2028 (Baa1/BBB+) the top volume movers of Monday’s session.

DISH Network Corp.’s three tranches of convertible notes (B3/CCC) were also active with the notes hovering near their all-time lows.

Investment-grade trades

It was another day of investment-grade issues dominating trading on Monday with selling activity in the IG issues of 2023 sparking speculation that more new paper was in store.

Duke Energy’s 4.125% convertible notes due 2026 were changing hands at 101.875 in the late afternoon.

There was $22 million in reported volume.

Duke’s stock traded to a high of $99.28 and a low of $97.56 before closing at $98.89, an increase of 0.54%.

Southern Co.’s 3.875% convertible notes due 2025 were trading at 103.25.

There was $30 million in reported volume.

Southern Co.’s stock traded between $74.15 and $73.22 before closing at $74.10, up 0.67%.

PPL’s 2.875% exchangeable notes due 2028 were seen at 100.5.

There was $15 million in reported volume.

PPL’s stock traded to a high of $28.77 and a low of $28.48 before closing at $28.67, edging 0.07% lower.

DISH crosses over

DISH’s three tranches of convertible notes were active on Monday with the notes hovering near their all-time lows as they switch into the hands of cross-over investors.

DISH’s soon-to-mature 2.375% convertible notes due March 15, 2024 continued to trade on an 86-handle.

The notes were wrapped around 86.5 with the yield about 19.7%, according to a market source.

There was $9 million in reported volume.

DISH’s 3.375% convertible notes due 2026 remained wrapped around 49 with the yield 28%.

However, there were odd-lot prints of the notes as low as 45, sources said.

There was $8 million in reported volume.

DISH’s 0% convertible notes due 2025 were also largely unchanged at 50 with the yield about 27.875%.

There was $6 million in reported volume.

Convertible holders have largely been punting their positions in DISH with the buyers of the notes largely cross-over investors, a source said.

DISH’s stock traded to a low of $7.43 and a high of $7.73 before closing at $7.49, a decrease of 1.19%.

The satellite broadcaster’s capital structure has been under pressure since late February when it announced a ransomware attack that resulted in weeks-long service outages.

The attack is expected to result in a substantial loss of subscribers, which will weigh heavily on the company’s earnings, which are scheduled for release in early May.

The company has a heavy debt load, and market players have begun to question the its ability to address its looming maturities.

The 2.375% convertible notes are the first in its debt stack to come due, sources said.

Mentioned in this article:

DISH Network Corp. NYSE: SO

Duke Energy Corp. NYSE: DUK

PPL Corp. NYSE: PPL

Southern Co. NYSE: SO

© 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.