Morning Commentary: Fortive convertibles in focus early; Booking notes active, flat

By Abigail W. Adams

Portland, Me., Nov. 27 – Trading activity in the convertibles secondary space was muted on Wednesday with the session expected to be non-eventful as many accounts in the United States close shop early for Thursday’s Thanksgiving holiday.

End-of-month activity seemed to be the major impetus of trading activity, a market source said.

There was $67 million in reported volume a little more than one hour into Wednesday’s session.

Fortive Corp.’s 0.875% convertible notes due 2022 accounted for the lion’s share of trading activity with more than $18 million of the bonds on the tape early in the session.

While the bonds were active, they were largely trading sideways with little movement in the notes or the underlying shares, a market source said.

The 0.875% notes were wrapped around 98.5. Fortive stock was $72.09, a decrease of 0.08%, shortly before 11 a.m. ET.

There appeared to be a large seller in the market with some $5 million plus trades on the tape.

With no news or volatility in the name, the trading activity was most likely the result of someone raising cash, a source said.

Booking Holdings Inc.’s 0.9% convertible notes due 2021 were also active although the notes and underlying equity were also largely flat, a source said.

The 0.9% notes were changing hands at 111.625 early in the session. Booking stock was $1,902.16, an increase of 0.78%, shortly before 11 a.m. ET.

The activity was also most likely the result of a cash raise, a source said.

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