Morning Commentary: Twitter’s convertible notes active, higher; Aegean Marine’s notes quoted lower

By Abigail W. Adams

Portland, Me., June 5 – The convertibles space was again off to a slow start on Tuesday with no new paper to stimulate trading activity.

There was little trading volume early in the session with the secondary market waiting to see what the primary market brings for new deals this week.

“The looming question is will we see decent issuance,” a market source said.

While the market was quiet, Twitter Inc.’s 1% convertible notes due 2021 were major volume movers early in the session with the notes up slightly outright as stock climbed more than 5%.

The notes were up about 0.625 point outright to trade up to 95.5, a market source said. Twitter stock was up almost $2 to $39.82 early Tuesday.

Twitter’s 0.25% notes due 2019 were not active early in the session. The notes have a much lower delta than the 1% notes and “don’t really nuke,” a market source said.

Twitter stock jumped on Tuesday on news the social networking site will join the S&P 500.

As Twitter stock gained, Aegean Marine Petroleum Network Inc.’s stock tanked on Tuesday. While Aegean’s convertible notes had not yet traded, they were quoted significantly lower.

Aegean’s 4.25% convertible notes due 2021 were quoted at 30 bid, 40 offered, a market source said. They were last seen trading in early May at 71.

Aegean’s 4% convertible notes due Nov. 1, 2018 were quoted at 50 bid, 60 offered, the source said. They were last seen trading at 96.

Aegean stock was down 71% on Tuesday to a new 52-week low of 82 cents early in the session. Aegean plummeted after an audit of the company’s 2017 year-end report revealed $200 million of accounts receivable that will need to be written off.

There may also be other adjustments stemming from the audit, which could impact Aegean’s financial statements, the company said in a press release.

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