Illumina convertibles eyed; Booking end-of-life trade in focus; Novocure down outright

By Abigail W. Adams

Portland, Me., July 1 – It was a quiet start to the third quarter in the convertibles secondary space with account clean-up and end-of-life trades the major driver of trading activity in the space.

There was $72 million in reported volume about one hour into the session and $296 million on the tape heading into the market close.

Illumina Inc.’s 0% convertible notes due 2023 and Booking Holdings Inc.’s soon-to-mature 0.9% convertible notes due Sept. 15, 2021 were the most active names in the secondary space with buyers scooping up the notes, a source said.

Southwest Airlines Co.’s 1.25% convertibles due 2025 (Baa1/BBB) were among the most actively traded notes early in the session. However, activity in the name petered out as the session progressed.

While the notes did not see heavy volume, Novocure Ltd.’s 0% convertible due 2025 saw the largest movement in price as stock tanked following disappointing results from a clinical trial.

Active names

Illumina’s 0% convertible notes due 2023 were the most actively traded issue in the secondary space on Thursday with a large buyer in the market.

The 0% notes were changing hands at 126.875 versus a stock price of $471.15 in the late afternoon.

There was more than $12 million of the bonds on the tape.

Illumina’s stock traded to a high of $476.16 and a low of $469.75 before closing the day at $470.66, a decrease of 0.54%.

While activity in the name petered out as the session progressed, Southwest’s 1.25% convertible notes due 2025 were active early in the session.

The activity was most likely some carry-over from end-of-quarter clean-up, sources said.

The reopening trade was also strong on Thursday with travel and leisure stocks posting gains.

Southwest’s 1.25% convertible notes were changing hands at 153.5 versus a stock price of $54.35 early in the session.

There was about $5 million in reported volume.

Southwest’s stock traded to a low of $53.34 and a high of $54.38 before closing the day at $53.86, an increase of 1.43%.

End-of-life

Booking’s soon-to-mature 0.9% convertible notes due Sept. 15, 2021 remained active on Thursday with buyers attempting to squeeze out some minor profits from the notes before they are retired.

The notes were changing hands at 109.5 versus a stock price of $2,192.50 early in the session.

They were changing hands at $108.5 versus a stock price of $2,204.84 in the late afternoon.

There was more than $8 million in reported volume.

Booking’s stock traded to a high of $2,224 and a low of $2,194.67 before closing the day at $2,210.02, an increase of 1%.

Novocure down outright

While volume in the name was light, Novocure’s 0% convertible notes due 2025 saw the largest movement in terms of price.

The 0% convertible notes dropped about 15 points outright with stock down 14%.

They were changing hands at 136 versus a stock price of $190 in the late afternoon.

The bonds expanded about 0.5 point on the move down, a source said.

“The 0% don’t hold on the way down,” the source said.

Given the stock move, the bonds would have expanded more had they had a coupon.

Novocure stock traded to a high of $207.48 and a low of $185.06 before closing the day at $189.72, a decrease of 14.47%.

Stock tanked after the oncology company reported disappointing results from its phase 2 clinical trial of Hepanova, a treatment for liver cancer.

Mentioned in this article:

Booking Holdings Inc. Nasdaq: BKNG

Illumina Inc. Nasdaq: ILMN

Novocure Ltd. Nasdaq: NVCR

Southwest Airlines Co. NYSE: LUV

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