Panic grips market amid sell-off; high-grade convertibles weaken; Square, Enphase lower

By Abigail W. Adams

Portland, Me., March 12 – The tumult continued on Wall Street on Thursday with the second equity trading halt of the week triggered shortly after the opening bell.

When trading resumed, the flight from risk assets accelerated with little reprieve following central bank action.

While stocks briefly bounced off their lows following the Federal Reserve’s announcement that it would inject up to $1.5 trillion of short-term funding into the markets, the bounce was short-lived.

The Dow Jones industrial average closed the day down 9.99%, the S&P 500 closed down 9.51%, and the Nasdaq Composite closed the day down 9.43%.

It was the worst day for equities since the “Black Monday” market crash of Oct. 19, 1987 with stocks now officially in a bear market.

The convertibles secondary space continued to succumb to selling pressure.

There was $89 million in reported volume about one hour into the session and $588 million in reported volume about one hour before the market close.

Market players continued to look for markets in names with any liquidity.

Investment-grade paper, which has been in demand amid the market turmoil, was trading down on Thursday.

Booking Holdings Inc.’s soon-to-mature 0.35% convertible notes due June 15, 2020, Fortive Corp.’s 0.875% convertible notes due 2022 and Euronet Worldwide Inc.’s 0.75% convertible notes due 2049 were among the volume movers of Thursday’s session.

Microchip Technology Inc.’s 1.625% convertible notes due 2027 dropped almost to par in active trading.

Akamai Technologies Inc.’s 0.125% convertible notes due 2025 were holding early in the session but also tumbled in active trading as losses in stock accelerated.

On the new deal front, Square Inc.’s recently priced 0.125% convertible notes due 2025 and Enphase Energy Inc.’s recently priced 0.25% convertible notes due 2025 extended their losses in active trading with both now in the mid-80s.

High grade weakens

Investment-grade and short-duration paper has been in demand amid the market turmoil and until recently has held up relatively well as the overall secondary space succumbed to selling pressure, sources said.

However, the investment-grade paper was cracking on Thursday.

Fortive’s 0.875% convertible notes due 2022 dropped about 2 points outright to a 96 handle in active trading, according to a market source.

The notes saw more than $30 million in reported volume by the late afternoon, again making them one of the most active names in the secondary space.

Fortive stock traded to a low of $52.40 and high of $57.86 before closing the day at $55.73, a decrease of 6.23%.

Booking Holdings’ soon-to-mature 0.35% convertible notes due June 15, 2020 topped the volume charts on Thursday with almost $50 million in reported volume.

The notes were down 5 points outright.

They were changing hands at 110.625 versus a stock price of $1,311.76, according to a market source.

Booking Holdings stock traded to a low of $1,280.00 and a high of $1,369.99 before closing the day at $1,280.40, a decrease of 11.24%.

Euronet Worldwide’s 0.75% convertible notes due 2049 dropped below par for the first time since they were issued in March 2019.

The 0.75% notes shaved off 2 points outright. They traded as low as 99.5 during Thursday’s session with the last trade of the day 99.875, according to a market source.

More than $14 million of the bonds were on the tape by the late afternoon.

Euronet Worldwide stock traded to a high of $93.79 and a low of $85.40 before closing the day at $85.57, a decrease of 12.84%.

The tech sector

The tech sector continued to get pummeled on Thursday.

Akamai Technologies was one of the few stocks on the S&P 500 to remain in positive territory early in Thursday’s session.

However, that was short-lived with stock also selling off as the session progressed.

Akamai’s 0.125% convertible notes due 2025 were holding early in the session.

The notes traded down about 0.5 point outright to 110.125 early Thursday when its stock was still in positive territory, sources said.

However, the notes traded off alongside stock heading into the afternoon.

The 0.125% notes were changing hands at 106.625 versus a stock price of $82.82 in the late afternoon.

The bonds saw more than $10 million in reported volume.

Akamai stock traded to a high of $88.80 and a low of $79.81 before closing the day at $80.05, a decrease of 8.01%.

Microchip Technology’s 1.625% convertible notes due 2027 tumbled to its lowest outright price since the market rout of October 2018.

The 1.625% notes tumbled 10 points outright. They were changing hands at 101.25 versus a stock price of $64.79 in the late afternoon.

The notes saw more than $12 million in reported volume during Thursday’s session.

Microchip stock traded to a high of $70.41 and a low of $61.84 before closing the day at $62.32, a decrease of 15.10%.

New deals

The deals to price at the outset of the market turmoil continued to sell off in Thursday’s carnage.

Square’s 0.125% convertible notes due 2025 sank to the mid-80s in active trading.

They were down about 6 points outright to 87.875 in the mid-afternoon with about $13 million in reported volume, according to a market source.

Square stock traded to a high of $58.04 and a low of $52.97 before closing the day at $53.57, a decrease of 14.18%.

Enphase Energy’s recently priced 0.25% convertible notes due 2025 were down more than 5 points outright to 85.

Enphase stock cratered on Thursday. Stock traded to a high of $37.39 and a low of $33.00 before closing the day at $33.02.

Enphase priced a $320 million offering of the 0.25% notes at par on March 5 when stock was $53.47.

Mentioned in this article:

Akamai Technologies Inc. Nasdaq: AKAM

Booking Holdings Inc. Nasdaq: BKNG

Enphase Energy Inc. Nasdaq: ENPH

Euronet Worldwide Inc. Nasdaq: EEFT

Fortive Corp. NYSE: FTV

Microchip Technology Inc. Nasdaq: MCHP

Square Inc. NYSE: SQ

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