Investment-grade convertibles active; Haemonetics tanks outright; Peloton improves

By Abigail W. Adams

Portland, Me., April 19 – The convertible secondary space was quiet on Monday; however, there was an improved tone despite an off day for equities with the tech sector leading benchmarks lower.

The shortage of new paper over the past two weeks has provided a boost to the secondary market with buyers reevaluating outstanding issues.

“People are picking through the rubble,” a source said.

While primary market activity is expected to remain subdued with earnings season in full force, a pick-up in new issuance is expected once companies exit their earnings season blackouts.

Investment-grade convertibles continued to top the volume charts with high-grade names favored among buyers.

Fortive Corp.’s 0.875% convertible notes due 2022 and Expedia Group Inc.’s 0% convertible notes due 2026 saw heavy volume although with little movement in price.

Haemonetics Corp.’s 0% convertible notes due 2026 returned to focus with the notes tanking outright but relatively unchanged dollar-neutral as stock dropped more than 30%.

Peloton Interactive Inc.’s 0% convertible notes due 2026 were also active with the notes down outright but improved dollar-neutral with stock also under pressure during Monday’s session.

Investment grade

Investment-grade convertible notes continued to be sought out by buyers with Fortive’s 0.875% convertible notes due 2022 and Expedia’s 0% convertible notes due 2026 active on a relatively low volume day.

Fortive’s 0.875% convertible notes due 2022 were changing hands around 101.375 early in the session.

They dropped down to 101 heading into the market close.

Fortive’s stock traded to a high of $72.44 and a low of $71.70 before closing the day relatively flat at $72.35, a decrease of 0.041%.

Expedia’s 0% convertible notes due 2026 continued to trade actively.

The notes were changing hands at 109.875 versus a stock price of $175.52 early in the session.

They traded down to 109.25 in the late afternoon.

Expedia’s stock traded to a high of $177.88 and a low of $172.06 before closing the day at $175.62, an increase of 0.98%.

Haemonetics drops

Haemonetics’ 0% convertible notes due 2026 returned to focus on Monday as stock dropped more than 36%.

While the notes tanked outright, they were largely moving in line dollar-neutral.

However, they were a little firmer on swap heading into the market close, a source said.

The notes dropped more than 15 points outright.

They were marked at 83 bid, 84 offered versus a stock price of $75 in the late afternoon.

While the issue is rarely seen on the tape, they were one of the top traders during Monday’s session with more than $30 million in reported volume.

The company’s stock traded to a high of $93.74 and a low of $74.10 before closing the day at $74.68, a decrease of 36.15%.

The global provider of blood and plasma supplies and services saw its stock tank after it announced that CSL Plasma Ltd. chose not to renew a supply agreement.

The supply agreement accounted for 11.8% of the Haemonetics’ total revenue, the company said in a press release.

Peloton in focus

While outright losses continued to mount for Peloton’s 0% convertible notes due 2026, the notes were improving dollar-neutral with stock under pressure on Monday.

The 0% convertible notes were down more than 2 points outright.

They traded down to 93.5 versus a stock price of $109.16 early in Monday’s session.

They continued to trade around 93.5 as stock sank further as the session progressed.

The notes were improved about 0.5 point dollar-neutral, a source said.

Peloton’s stock traded to a high of $112.91 and a low of $104.58 before closing the day at $107.75, a decrease of 7.28%.

Stock was under pressure after the Consumer Product Safety Commission issued a safety warning about the company’s Peloton Tread+ exercise machine, which urged owners with children to stop using the machine.

Peloton CEO John Foley has publicly pushed back against the warning, claiming the product is safe if proper safety protocols are followed.

Mentioned in this article:

Expedia Group Inc. Nasdaq: EXPE

Fortive Corp. NYSE: FTV

Haemonetics Corp. NYSE: HAE

Peloton Interactive Inc. Nasdaq: PTON

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