DISH convertible notes continue to rally; Snap, Alliant Energy paper active

By Abigail W. Adams

Portland, Me., Jan. 12 – The convertibles secondary space saw a quiet yet firm end to the week with equity and Treasury markets mixed after the latest piece of inflationary data and the launch of earnings.

Cracks were beginning to show in the economy as the big banks unveiled earnings with Citigroup announcing mass layoffs alongside disappointing results.

However, the latest Producer Price Index report showed a faster decline in wholesale prices than expected, supporting the market’s rate cut expectations.

Equity indexes were either side of unchanged as the short end of the Treasury curve continued to rally.

The Dow Jones industrial average closed Friday down 118 points, or 0.31%, the S&P 500 index closed up 0.08%, the Nasdaq Composite index closed up 0.02% and the Russell 2000 index closed down 0.23%.

There was $68 million in reported volume about one hour into the session and $431 million on the tape in the late afternoon with DISH Network Corp. again the name of the day.

The convertible notes (Caa2/CCC-) continued their rally with the notes benefactors of the company’s asset reshuffle that sparked a fire-sale in its straight debt.

Snap Inc.’s 0.125% convertible notes due 2028 were slightly weaker in active trade on a red day for stock.

Alliant Energy Corp.’s 3.875% convertible notes due 2026 (BBB+) saw heavy volume although with little movement in price.

DISH rally continues

DISH’s convertible notes continued their upward momentum in heavy volume on Friday with the notes benefactors of the company’s highly controversial asset reshuffle announced on Wednesday.

The 0% convertible notes due 2025 added 1.5 to 2 points in heavy volume.

The notes were trading at 68.25 in the late afternoon with the yield 21%.

With $38 million in reported volume, the notes were the most actively traded issue during Friday’s session.

DISH’s soon-to-mature 2.375% convertible notes due March 15, 2024 remained on a 98-handle.

They were changing hands at 98.5 with a yield of about 11.625% in the late afternoon.

There was $12 million in reported volume.

DISH’s 3.375% convertible notes due 2026 added 2 points to climb to a 55-handle.

They were trading at 55.25 with a yield of 29.25% in the late afternoon, according to a market source.

There was $10 million in reported volume.

While the convertible notes are not equity sensitive, EchoStar’s stock was largely flat on Friday and closed the day at $16.06, a decrease of 0.12%.

DISH’s announcement on Wednesday that it was transferring its unencumbered wireless spectrum licenses to the newly formed subsidiary EchoStar Wireless Holding LLC upended its capital structure.

The convertible notes, which are linked to the EchoStar portion of the newly merged DISH/EchoStar company, have rallied strongly on the news with the notes benefactors of the asset transfer.

The 3.375% convertible notes have gained 5 to 6 points and the 0% convertible notes have gained 8 to 9 points on the news.

However, DISH’s straight debt tanked with the asset shuffle moving assets outside of the reach of creditors.

DISH’s straight debt creditors are planning on pursuing legal action, a source said.

Snap weaker

Snap’s 0.125% convertible notes due 2028 were slightly weaker in active trade on Friday on a red day for the company’s stock.

The 0.125% notes were off about 0.5 point outright with stock down 3%.

They were trading at 79 versus a stock price of $16.62 in the late afternoon.

The yield was about 6%.

There was $17 million in reported volume.

Snap’s stock traded to a high of $17.01 and a low of $16.37 before closing at $16.43, down 3.81%.

Alliant active

Alliant’s 3.875% convertible notes due 2026 saw heavy volume on Friday although with little movement in price.

The 3.875% notes were wrapped around 99 versus a stock price of $50.09 early in the session, according to a market source.

They continued to trade around 99 in the late afternoon.

There was $16 million in reported volume.

Alliant’s stock traded to a low of $50.05 and a high of $50.62 before closing at $50.38, up 0.58%.

Mentioned in this article:

Alliant Energy Corp. Nasdaq: LNT

EchoStar Corp. Nasdaq: SATS

Snap Inc. NYSE: SNAP

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