Western Digital convertibles active; Turning Point up; Exact Sciences down outright

By Abigail W. Adams

Portland, Me., July 29 – It was a slow summer Monday in the convertibles secondary space with about $53 million on the tape a little over one hour into the session and $230 million in reported volume heading into the market close.

However, the week promises to be action packed with a full week of earnings reports and a Federal Reserve rate cut on the horizon.

Exact Sciences Corp.’s convertible notes were in focus on Monday with the notes down outright but up on hedge as stock tanked following an announced acquisition.

Western Digital Corp.’s 1.5% convertible notes due 2024 continued to see high trading volume by dollar amount on Monday with the notes improving slightly.

While volume was light, Turning Point Brands, Inc.’s newly priced 2.5% convertible notes due 2024 continued to improve on Monday.

Exact Sciences expands

Exact Sciences’ convertible notes were in focus on Monday with the notes expanding as they traded down on an outright basis.

Exact Sciences’ 0.375% convertible notes due 2027 dropped about 10 points outright to 115.375 early in Monday’s session.

They improved as stock pared its losses into the afternoon and were changing hands just south of 120. The notes expanded about 1 point on a dollar-neutral basis, a market source said.

The 0.375% notes were among the most actively traded issues of Monday’s session with $14 million on the tape by the late afternoon.

The molecular diagnostics company’s 1% convertible notes due 2025 dropped more than 10 points outright.

They were changing hands at 162 versus a stock price of $109.18 in the late afternoon.

The 1% notes expanded 0.5 point on a dollar-neutral basis, according to a market source.

The bonds saw more than $10 million in reported volume by the late afternoon.

Exact Sciences stock tanked on Monday following news that it would purchase Redwood City, Calif.-based genetic research and cancer testing company Genomic Health.

Stock traded as low as $101.40 early Monday but pared its losses as the session progressed.

Stock traded as high as $118.70 before closing the day at $117.57, a decrease of 0.3%.

Exact Sciences plans to purchase Genomic Health for $2.8 billion in a cash and stock transaction.

Genomic Health stockholders will receive $27.50 in cash and $44.50 in Exact Sciences stock under the terms of the deal, CNBC reported.

Western Digital active

Western Digital’s 1.5% convertible notes due 2024 were again among the most actively traded issues in the secondary space by dollar amount.

The 1.5% notes were changing hands around 93.625 early in the session. They traded just shy of 94 in the late afternoon with the yield 2.96%, sources said.

There was about $12.5 million in reported volume by the late afternoon. However, there were only five trades on the tape.

Western Digital stock closed Monday at $55.79, a decrease of 1.26%.

However, the 1.5% notes mostly trade for the yield, sources said.

The notes have seen high volume trading in recent session with some holders most likely exiting their positions, a source said.

Turning Point improves

While volume was light, Turning Point’s newly priced 2.5% convertible notes due 2024 continued to improve on Monday.

The notes were quoted around 104.5 with stock changing hands around $43.00, a market source said. They were improved another 0.5 point dollar-neutral.

Turning Point stock closed Monday at $42.48, an increase of 1.48%.

The deal “did well and continues to do well,” a source said.

The 2.5% notes expanded as much as 2 points dollar-neutral on their secondary market debut on Friday.

Mentioned in this article:

Exact Sciences Corp. Nasdaq: EXAS

Turning Point Brands, Inc. NYSE: TPB

Western Digital Corp. Nasdaq: WDC

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