Morning Commentary: Convertibles primary, secondary quiet; Colony Capital notes active

By Abigail W. Adams

Portland, Me., July 20 – The convertibles primary market was dormant at the launch of the week.

While some deals may surface as companies continue to raise capital to boost liquidity, new deal activity is expected to remain light as earnings reports filter in.

Snap Inc., Tesla Inc. and American Airlines Group Inc. will be among the convertible issuers whose earnings will be closely watched in the coming days.

The secondary space was equally quiet at the launch of the week with about $70 million on the tape a little over one hour into Monday’s session.

While few names saw concentrated trading activity, Colony Capital Inc.’s convertible notes were active early in the session.

The investment firm’s recently priced 5.75% convertible notes due 2025 continued to gain in active trading their second day in the secondary space.

The notes were changing hands at 107.75 with stock down early in the session, a market source said.

The 5.75% notes expanded more than 4 points dollar-neutral and traded up more than 5 points outright on their secondary market debut last Friday.

The soon-to-mature 3.875% convertible notes due Jan. 15, 2021 were changing hands at 99 early in the session.

There were about $4 million of the bonds on the tape early in the session.

Proceeds from the company’s new offering will be used to repurchase the 3.875% notes prior to maturity or repay the notes at maturity.

Colony’s stock was changing hands at $1.86, a decrease of 2.37%, 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.