Ventas Realty exchangeable notes active; Coinbase gains on buyback; Lumentum expands

By Abigail W. Adams

Portland, Me., June 16 – It was a quiet end to the week in the convertibles secondary space as activity diminished ahead of the holiday weekend in the United States.

Equities were mixed early but turned negative as the session progressed as markets continue to digest the Fed announcement and attempt to gage the future trajectory of rates.

The Dow Jones industrial average closed down 109 points, or 0.32%, the S&P 500 index closed down 0.37%, the Nasdaq Composite index closed down 0.68% and the Russell 2000 index closed down 0.73%.

There was $63 million in reported convertible bond trading volume about one hour into the session and $378 million about one hour before the market close.

While the secondary space was quiet, it was not dead with new and recent issues and topical news a driver of activity in the space.

Ventas Realty, LP’s 3.75% exchangeable notes due 2026 (Baa1/BBB+) continued to see heavy volume with the notes gaining outright alongside stock after a bout of volatility earlier in the week.

After falling flat on hedge in initial trading, Lumentum Holdings Inc.’s new 1.5% convertible notes due 2029 began to expand on a dollar-neutral basis as it continued to shoot higher outright.

Coinbase Global, Inc.’s 0.5% convertible notes due 2026 gained in active trade after the company announced a privately negotiated buyback of the notes.

Ventas rises

Ventas’ 3.75% exchangeable notes due 2026 continued to see heavy volume on Friday with the notes gaining alongside stock.

The 3.75% exchangeable notes were changing hands at 102.125 versus a stock price of $46.58 early in the session, according to a market source.

They continued to trade around 102 in the late afternoon.

There was $17 million in reported volume.

Ventas’ stock spent most of Friday’s session in positive territory but was dragged into the red by the close.

Stock traded to a low of $45.96 and a high of $47 before closing at $46.08, a decrease of 0.11%.

The notes have been volatile in active trade over the week.

They briefly dropped to par on Wednesday as markets priced in a more aggressive move by the Fed than anticipated but quickly recovered as markets stabilized.

The notes are expected to continue to improve with the notes slated to enter the Refinitiv convertibles indexes on June 21, a source said.

Lumentum up on hedge

After a lackluster performance on hedge since hitting the secondary space, Lumentum’s 1.5% convertible notes expanded in active trade on Friday.

The 1.5% notes gained 1.75 points outright with stock up about 2%.

The notes were seen at 104.875 versus a stock price of $57.41 in the late afternoon, according to a market source. They expanded about 0.5 point on hedge.

“They’re finally doing something,” a source said.

There was $10 million in reported volume.

The notes have made strong outright gains since their aftermarket debut on Wednesday.

However, they were largely moving in line with stock and were flat dollar-neutral.

Lumentum’s 0.5% convertible notes due 2028 were also active with the notes adding about 1 point outright.

They were trading at 79.375 versus a stock price of $57.38 in the late afternoon.

There was $13 million in reported volume.

Lumentum’s stock traded to a high of $59.74 and a low of $56.58 before closing at $57.80, an increase of 2.48%.

Coinbase’s buyback

Coinbase’s 0.5% convertible notes due 2026 made strong gains on the heels of a privately negotiated buyback of a portion of the notes.

The 0.5% notes jumped 2 points to 71.25, which was the price of the buyback, a source said.

They were holding that level in subsequent trading activity.

There was $14 million in reported volume.

Coinbase’s stock traded to a low of $53.90 and a high of $56.28 before closing at $55.59, up 2.47%.

Coinbase announced that it had repurchased $64.5 million in principal of the 0.5% notes for $45.5 million in privately negotiated transactions.

The buyback was unexpected with the crypto-exchange recently sued by the Securities and Exchange Commission for the sale of tokens, which the SEC claims are unregistered securities.

Mentioned in this article:

Coinbase Global, Inc. Nasdaq: COIN

Lumentum Holdings Inc. Nasdaq: LITE

Ventas Realty, LP NYSE: VTR

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