Morning Commentary: Deutsche Bank equity-linked notes tied to Voya Financial in focus

By Abigail W. Adams

Portland, Me., March 19 – The rout continued in the convertibles secondary space as equity markets wavered between positive and negative territory with investors weighing the latest economic news and policy responses to the coronavirus pandemic.

After brief forays into positive territory, the Dow Jones industrial average was down 0.53% and the S&P 500 index was down 0.33% shortly before 11 a.m. ET.

After dipping into negative territory early in the session, the Nasdaq composite was up 1.36% shortly before 11 a.m. ET.

Markets opened on Thursday with news that weekly jobless claims in the United States spiked by 33% last week with coronavirus induced layoffs beginning to rear their head.

The news wiped out the gains made in futures in response to the European Central Bank’s latest policy response.

The convertibles secondary space saw decent trading volume in light of the volatility with $74 million in reported volume about one hour into the session.

However, there was a wide breadth to the trading action with few names seeing concentrated activity.

Deutsche Bank AG, London Branch’s 1% cash-settled equity linked notes due 2023 tied to Voya Financial, Inc. were major volume movers early in the session.

While the notes saw only three trades, $15 million in reported volume changed hands, according to a market source.

The 1% notes were changing hands at 93.75.

Voya stock was $33.20, a decrease of 6.22%, shortly before 11 a.m. ET.

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