Morning Commentary: Illumina, Tesla convertible notes active amid equity volatility

By Abigail W. Adams

Portland, Me., Jan. 28 – There was decent trading volume in the convertible secondary space on Monday as equity markets stood poised for a brutal session following renewed concerns about future growth.

While several semiconductor companies’ stocks were taking a hit early Monday, their convertible bonds were slow to trade.

There was about $72 million on the tape early in Monday’s session with Illumina Inc.’s 0.5% convertible notes due 2021 the volume leader.

The 0.5% notes saw two large trades totaling $7.5 million, a market source said. The notes were changing hands around 129.25.

While one $2.5 million trade was from a dealer selling to a customer, it was followed shortly thereafter by a $5 million plus trade with a buysider selling to a dealer, a source said.

Illumina stock continued its downward momentum early Monday, trading down to $288.05, a decrease of 1.98%.

The stock has trended lower since Deutsche Bank analysts downgraded the stock to “hold” from “buy.”

Tesla Inc.’s soon-to-mature 0.25% convertible notes due March 1, 2019 were also active with more than $6 million of the bonds on the tape early in the session.

The notes were changing hands between par and 100.125, a market source said.

With the maturity of the notes about one month away, they are now trading largely on their ability to be redeemed, sources said.

Tesla stock is now well below the $359 conversion price on the 0.25% notes. Tesla stock was $293.79, a decrease of 1.09%, shortly before 11 a.m. ET.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.