Morning Commentary: Southwest Airlines convertible notes active on quiet morning

By Abigail W. Adams

Portland, Me., Nov. 28 – The convertibles primary and secondary markets saw a slow start to the week with no deals launched and trading activity light.

While the primary market was quiet prior to the market open, sources expect a burst of activity over the next two weeks as dealers and issuers rush to get deals done before the year comes to a close.

Equities launched the week in the red with protests in China rattling markets.

The Dow Jones industrial average was down 237 points, or 0.68%, the S&P 500 index was down 0.86%, the Nasdaq Composite index was down 0.83% and the Russell 2000 index was down 1.08% shortly before 11 a.m. ET.

There was $50 million in reported volume about one hour into the session with few names seeing concentrated trading activity and little price movement in the names that did trade.

Southwest Airlines Co.’s 1.25% convertibles due 2025 (Baa1/BBB) were the most actively traded name early in the session although the notes were largely unchanged.

The 1.25% convertible notes were changing hands at 129.5 versus a stock price of $38.91 early in the session.

There was $7.5 million in reported convertibles trading volume in the name.

Southwest Airlines’ stock was trading at $38.93, a decrease of 0.74%, shortly before 11 a.m. ET.

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