Morning Commentary: Equities move higher and Southwest continues to gain altitude

Chicago, July 18 – The convertible bond market made no progress on the new deal front on Monday morning, but equity indices were rallying during the morning session with crude oil, which was also trending higher.

Now a platinum frequent flyer for the month of July, Southwest Airlines Co.’s 1.25% convertibles due 2025 (Baa1/BBB) are still on the tape.

The notes were routinely clearing the 128 threshold throughout the morning, brushing just shy of 129.

Trading prices were in the 118 to 119 area at the beginning of July.

Stock was up for the Dallas-based airline in the morning, too. Trading 2.48% higher, shares were moving at $40.54 mid-morning.

The stock price was $28.50 when the $2.3 billion of notes were sold in April 2020 and the conversion premium was 35%, for a conversion price of $38.48.

Top gainers on Monday morning on the equity side included vacation names NCL Corp. Ltd. and Carnival Corp.

In spite of the stocks of both Norwegian and Carnival jumping 8% higher, there were no nibblers on the convertible bonds at the end of Monday morning.

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