Convertibles primary on hold; selling continues in secondary market; Fortive in focus

By Abigail W. Adams

Portland, Me., Jan. 25 – The convertibles primary market remained on hold on Tuesday as equities retraced Monday’s late-day gains and opened with steep losses.

Several deals that were planned for January have been placed on the back burner due to the tumult in equities, a source said.

The Dow Jones industrial average was down 418 points, or 1.22%, the S&P 500 index was down 1.9%, the Nasdaq Composite was down 2.5% and the Russell 2000 was down 2.07% shortly before 11 a.m. ET.

The market will be awaiting the Federal Reserve’s announcement on Wednesday with baited breath. “People are on pins and needles,” a source said.

Selling continued in the secondary space with holders focused on offloading their profitable position to raise cash in case of redemptions, a source said.

However, the selling activity early Tuesday was orderly.

There was $110 million in reported volume about one hour into the session.

Fortive Corp.’s 0.875% convertible notes due Feb. 15, 2022 were in focus early in the session as the notes approach their maturity.

The 0.875% notes continued to trade around par with a yield just north of 1%.

There was $15 million in reported volume.

The notes will be redeemed at par upon their maturity with the conversion value of the notes long gone, a source said.

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