Morning Commentary: Wayfair active, new convertible notes below par in early activity

By Abigail W. Adams

Portland, Me., Sept. 4 – Trading activity in the convertibles secondary space continued to wind down on Friday as equities extended their losses.

There was $58 million on the tape about one hour into the session with volume expected to remain light in the run up to the holiday weekend.

While volume was light, there continued to be large movements in the equities of convertible issuers.

Wayfair Inc.’s convertible notes were active as stock sank following an analyst downgrade.

Wayfair’s new 0.625% convertible notes due 2025 sank further below par on Friday.

The notes traded as low as 97.75 early Wednesday after closing the previous session at 99, a market source said.

Wayfair’s 1.125% convertible notes due 2024 were also active with the notes down 12 points outright to 234.5 early in the session.

Wayfair stock traded down to $236.77, a decrease of 14.12%, shortly before 11 a.m. ET.

In addition to the general sell-off in equities, Wayfair stock was tanking following a downgrade from a BofA Securities analyst.

Wayfair’s 0.625% convertible notes due 2025 traded below par on Thursday for the first time since pricing on Aug. 11.

The notes hit their highest outright level since pricing, trading at 109 7/8 last Wednesday, a source said.

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