Southwest Airlines gains outright; Western Digital pares losses; BlackLine tops par

By Abigail W. Adams

Portland, Me., Oct. 14 – It was an active day in the convertibles secondary space as a risk-on sentiment returned to equity markets on the heels of positive earnings and a slipping 10-year Treasury yield, which closed the day at 1.52%.

The Dow Jones industrial average closed the day up 535 points, or 1.56%, the S&P 500 index was up 1.71%, the Nasdaq Composite was up 1.73% and the Russell 2000 index was up 1.34%.

There was about $200 million in reported volume a little over one hour into the session and $659 million in reported volume heading into the market close.

Sea Ltd.’s 0.25% convertible notes due 2026 continued to see high-volume activity although the notes were largely unchanged.

However, Southwest Airlines Co.’s 1.25% convertibles due 2025 (Baa1/BBB) eclipsed Sea as the most actively traded issue during Thursday’s session with the notes gaining on an outright basis.

Western Digital Corp.’s 1.5% convertible notes due 2024 remained active with the notes paring their losses from earlier in the week.

BlackLine Inc.’s 0% convertible notes due 2026 also made an appearance on the tape with the notes topping par for the first time since late September.

Sea active

Sea’s 0.25% convertible notes due 2026 continued to see heavy volume in the secondary space although with little movement in price.

The 0.25% notes continued to trade on a 105-handle throughout Thursday’s session with the company’s equity down slightly heading into the market close.

The notes were changing hands at 105.25 versus an equity price of $346.15 in the late afternoon.

There was more than $29.5 million in reported volume.

Sea’s American Depositary Shares traded to a high of $354.65 and a low of $344.88 before closing the day at $345.37, a decrease of 1.15%.

The 0.25% convertible notes have topped the volume charts throughout the week.

They hit their highest outright level on Wednesday as the company’s ADRs touched their highest level since the notes priced.

However, the notes lagged slightly on the move up, a source said.

Southwest gains

Southwest Airlines’ 1.25% convertible notes due 2025 were the most actively traded issue during Thursday’s session with the notes improving on an outright basis.

The notes gained 1.5 points outright, a source said.

They were changing hands at 150.5 versus a stock price of $51.43 in the late afternoon.

There was more than $35 million in reported volume heading into the close.

Southwest Airlines’ stock traded to a high of $52.09 and a low of $51.40 before closing the day at $51.51, an increase of 0.53%.

Stock was on the rebound after dropping more than 5% over the past week following the cancellation of about 2,000 flights over the weekend.

Western Digital pares losses

Western Digital’s 1.5% convertible notes due 2024 were on the rise on an outright basis as stock pared its losses from the past week.

The 1.5% convertible notes gained about 0.5 point outright with stock up more than 4%.

The 1.5% notes were changing hands at 100.625 versus a stock price of $56.91 in the late afternoon.

There was $15 million in reported volume.

Western Digital’s stock traded to a low of $54.52 and a high of $57.06 before closing the day at $56.55, an increase of 4.32%.

Stock nearly erased its losses since Monday.

While Western Digital’s stock was trading down alongside the broader semiconductor sector on concerns over a supply glut, the semiconductor sector was lifted on Thursday after chipmaker TSMC beat earnings expectations and raised its forward guidance.

BlackLine tops par

BlackLine’s 0% convertible notes due 2026 were also on the rise on an outright basis as stock was lifted alongside the broader market.

The 0% convertible notes were changing hands at 101.125 versus a stock price of $124.64 in the late afternoon.

There was more than $13 million in reported volume.

Thursday marked the first time the notes have traded above par since late September.

BlackLine’s stock traded to a low of $123.79 and a high of $126.08 before closing the day at $123.92, an increase of 1.32%.

Mentioned in this article:

BlackLine Inc. Nasdaq: BL

Sea Ltd. NYSE: SE

Southwest Airlines Co. NYSE: LUV

Western Digital Corp. Nasdaq: WDC

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