Morning Commentary: Convertibles secondary market quiet; new paper slow to trade

By Abigail W. Adams

Portland, Me., April 10 – The secondary market remained quiet early in Tuesday’s session with no new paper entering the space and the deals from last week slow to trade.

Pure Storage’s recently priced 0.125% convertible notes due 2023 were seen trading at 99.5 early in the session versus a stock price of $18.53.

After their initial expansion on their market debut on April 5, Pure Storage notes have dropped on an outright basis as the company stock dropped and traded below par much of Monday.

However, the notes were moving in-line dollar neutral.

Meanwhile, Gannett Co. Inc.’s recently priced 4.75% convertible notes due 2024 remain strong.

In limited activity on Monday, the 4.75% notes traded in the 102 to 103 range. Gannett stock closed Monday at $9.29, an increase of about 1.3% and was again on the rise on Tuesday.

Gannett stock was up to $9.475, an increase of almost 2%, early Tuesday.

BofA Finance LLC’s recently priced 0.25% cash-settled equity-linked notes due 2023 tied to Voya Financial Inc. stock have seen low trading volume since their market debut on April 6. The 0.25% notes were seen trading at 99 early in Tuesday’s session.

The notes have largely been wrapped around 99 since hitting the market. While the threshold premium for the notes was set at 37.5%, the threshold reference price will not be determined until the end of a five-day averaging period which began on April 6.

Voya stock was seen at $50.55, an increase of 1.73%, early in Tuesday’s session.

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