Morning Commentary: Ares Capital convertibles see high trading volume; Tilray rebounds

By Abigail W. Adams

Portland, Me., Oct. 15 – The convertible secondary space opened the week with decent trading volume, although the new paper to price last week was not active.

There was about $56 million on the tape early in the session with Ares Capital Corp.’s 4.375% convertible notes due 2019 the volume leader, according to a market source.

The 4.375% notes changed hands around 100.25 with $14 million bonds in play less than one hour after the opening bell.

With the short duration until maturity, the 4.375% notes trade for their yield, which was about 3.3%.

The trading activity was most likely driven by a seller looking to raise cash or moving on to another issue, the source said.

While less active, Tilray Inc.’s 5% convertible notes rebounded early Monday after taking a hit in last week’s sell-off.

The notes jumped 4 points outright to trade at par in light volume early in Monday’s session.

Tilray stock was also on the rebound early Monday with stock up more than 5%.

The jump came after Tilray subsidiary High Park Holdings Ltd. unveiled its portfolio of cannabis brand products just days before the legalization of cannabis in Canada goes into full effect on Oct. 17.

The 5% notes closed Friday at 96 after dropping as low as 90 mid-week amid the “blood-letting” in equity markets, sources said.

Meanwhile, the new paper to hit the market last week was not seen trading early Monday.

Verastem Inc.’s 5% convertible notes due 2048 were not active with the deal tightly allocated, a market source said.

While there were few prints of the notes on their secondary market debut on Friday, they closed the day at 101, a market source said.

Karyopharm Therapeutics Inc.’s 3% convertible notes due 2025 were not seen on the tape early Monday.

The notes put in a strong secondary market performance after pricing last Thursday.

The notes closed Friday at 102.85 with stock at $12.60.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.