Morning Commentary: Lumentum convertible notes lower with stock in early trading

By Abigail W. Adams

Portland, Me., June 15 – It was a quiet start to the day in the convertibles secondary space as equity markets wobbled at the open but ultimately turned higher as markets continued to digest the Federal Open Market Committee’s decision.

While the Fed held rates as expected, the future trajectory remains uncertain with Fed officials presenting a much more hawkish outlook than anticipated.

The Dow Jones industrial average was up 248 points, or 0.73%, the S&P 500 index was up 0.5%, the Nasdaq Composite index was up 0.41% and the Russell 2000 index was up 0.16% shortly before 11 a.m. ET.

There was $69 million in reported volume about one hour into the session with Lumentum Holdings Inc.’s 1.5% convertible notes due 2029 remaining active.

The notes were lower in early trading alongside stock.

They were changing hands at 102.25 versus a stock price of $55.50 early in the session.

There was $11 million in reported volume.

Lumentum’s stock saw a weak open but fought back to positive territory as the session progressed.

Stock traded to a low of $54.76 soon after the opening bell but was changing hands at $56.60, an increase of 0.28%, shortly before 11 a.m. ET.

The 1.5% notes made strong outright gains on their aftermarket debut on Wednesday; however, they fell flat dollar-neutral.

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