Morning Commentary: Convertibles active; JPMorgan Voya-linked notes, Fortive in focus

By Abigail W. Adams

Portland, Me., June 18 – Trading activity in the convertibles secondary space was jumpstarted on Tuesday with equities skyrocketing as the Federal Reserve convenes and as the chairman of the European Central Bank signaled a willingness to cut rates.

There was about $112 million in reported volume on the tape about one hour into Tuesday’s session.

The Dow Jones industrial average surged 400 points, the S&P 500 rose 1.36% and the Nasdaq composite was up almost 2% at about 11 a.m. ET.

With uncertainty surrounding the Federal Reserve’s decision regarding rates, which will be announced on Wednesday, people were most likely taking advantage of the market conditions to trim their positions, a source said.

JPMorgan Chase Financial Co. LLC’s 0.25% cash-settled equity-linked notes due 2023 tied to Voya Financial, Inc. saw the highest reported volume with $12 million on the tape early in the session, according to a market source.

However, the trades were in large blocks with only three total trades on the tape – two which were $5 million plus and one $2 million trade.

The notes were last changing hands at 101.25.

Voya stock traded up to $54.395, an increase of 1.28%, shortly before 11 a.m. ET.

Fortive Corp.’s 0.875% convertible notes due 2022 also continued to see high-volume activity.

The notes were up about 1 point outright to 102.375.

There was almost $10 million in reported volume about one hour into Tuesday’s session.

Fortive stock was $78.08, an increase of 1.79%, shortly before 11 a.m. ET.

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