Convertibles primary ‘sleepy’; Wayfair flirts with gains; Rivian notes pop; NIO improves

By Cristal Cody

Tupelo, Miss., Sept. 26 – The convertibles primary market feels “sleepy” and stayed quiet for a second session on Tuesday, a source said.

Focus turned to the overall market as stocks slid out of the gate and moved lower over the afternoon.

The S&P 500 index closed down 1.47%, the Dow Jones industrial average fell 1.14%, the Nasdaq declined 1.57% and the Russell 200 index dropped 1.27%.

In the secondary market, Wayfair Inc.’s convertible notes climbed in early trading on Tuesday, while its stock moved lower as the online retailer faces bankruptcy chatter.

The 0.625% convertible notes due 2025 rose over 0.5 point in the morning’s strongest-traded issue but were flat to softer going out.

Rivian Automotive, Inc. saw the biggest gains about an hour into the session with its 4.625% convertible notes due 2029 around 5 points higher and the company’s equity over 6% better on an analyst upgrade.

The notes held on to most of the early gains but gave back some of the increase by the close in heavy trading.

Looking at new convertible issues in the secondary market, NIO Inc.’s notes also were among the morning’s strongest gainers in the convertibles market before pulling back by the afternoon.

The 4.625% convertible senior notes due 2030 traded more than 2.25 points higher over the morning and went out 1.75 points better on the day.

Wayfair flat to higher

Wayfair’s 0.625% convertible notes due 2025 saw strong secondary action over the afternoon after moving higher in early trading, sources said.

The notes were up over 0.5 point to 86.375 versus an equity price of $57.98 in the morning’s strongest-traded issue on $5 million of volume.

By the close, the issue was trading flat to softer at the 86.25 to 86.375 range.

Wayfair’s shares closed down 4.16% to $56.86.

Wayfair’s stock was down 2.34% an hour into trading Tuesday at $57.94.

The retailer has come under reported bankruptcy chatter over the past few days on lackluster earnings so far this year and mixed analyst recommendations.

Rivian jumps

Rivian Automotive’s 4.625% convertible notes due 2029 traded around 5 points higher at a print of 137.137 versus a stock price of $22.55 early Tuesday but gave back some of the early morning jump, sources said.

The issue was among the morning’s top traded convertible bonds on $4 million of reported volume and traded on more than $17 million of supply by the day’s end following an upbeat analyst report from Robert W. Baird.

The bonds were last seen at 135.97, up more than 3.75 points on the day.

Rivian Automotive’s stock traded 6.67% higher over the morning at $22.53 and ended the session 5.35% better at $22.26.

NIO gains

NIO’s new 4.625% convertible senior notes due 2030 went out 1.75 points higher on Tuesday at par, according to a market source.

The notes had traded more than 2.25 points better about an hour into the session at 100.583 versus an equity price of $8.52 on $2.1 million of volume, a source said.

NIO priced $500 million of the notes at par on Sept. 19 as part of a $1 billion two-tranche deal.

The company’s American Depositary Shares traded 2.41% better late morning at $8.55 but eased back by the close. Shares closed up 0.72% at $8.41.

NIO’s stock closed Monday down 2.11% after the issuer came under pressure on news reports that it had denied plans for another capital raise.

Mentioned in this article:

NIO Inc. Nasdaq: NIO

Rivian Automotive, Inc. Nasdaq: RIVN

Wayfair Inc. Nasdaq: W

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