Morning Commentary: Convertibles secondary quiet; Snap trades; Royal Caribbean tops par

By Abigail W. Adams

Portland, Me., Oct. 20 – The convertibles secondary space saw another slow start to the day on Tuesday with equity markets volatile following Monday’s sell-off.

While equity benchmarks saw a strong start to the session, they gave back much of their early gains and were mixed shortly before 11 a.m. ET.

The Dow Jones industrial average and S&P 500 were still in the green. However, the Nasdaq composite was wavering between gains and losses.

While the market awaited the final word on a pre-election stimulus package, with Tuesday being House speaker Nancy Pelosi’s designated deadline day, market players were also positioning themselves for earnings related volatility.

Snap Inc.’s convertible notes continued to trade with the camera and social media company slated to report earnings after the market close.

The 0.75% convertible notes due 2026 were changing hands at 146.375 with stock off slightly early in the session.

Snap’s stock was $28.41, a decrease of 0.87%, shortly before 11 a.m. ET.

Royal Caribbean Cruises Ltd.’s 2.875% convertible notes due 2023 also saw some activity with the notes improving on an outright basis alongside stock.

The 2.875% notes topped par and were changing hands at 100.5 early in the session.

Royal Caribbean’s stock was $60.25, an increase of 0.99%, shortly before 11 a.m. ET.

The 2.875% notes have struggled since hitting the aftermarket on Oct. 14, closing out last week on a 98-handle.

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