YY, Weibo convertible notes remain in focus; Vonage improves; Herbalife notes volatile

By Abigail W. Adams

Portland, Me., June 21 – The convertibles secondary space rounded out an active week with decent trading volume with focus remaining on China-based social media companies on Friday.

There was about $73 million in reported volume on the tape early in Friday’s session and $324 million by the mid-afternoon.

YY Inc.’s newly priced tranches and Weibo Corp.’s 1.25% convertible notes due 2022 again dominated activity in the secondary market.

YY’s 1.375% convertible notes due 2026 and 0.75% convertible notes due 2025 continued to improve on a dollar-neutral, or hedged, basis.

Weibo’s 1.25% convertible notes due 2022 also continued to post gains on an outright and dollar-neutral basis with the Beijing-based social media company the first China-based convertible issuer to achieve investment-grade status.

Vonage Holdings Corp.’s recently priced 1.75% convertible notes due 2024 also continued to improve on Friday with the notes riding the recent strength of the market.

Herbalife Nutrition Ltd.’s 2% convertible notes due Aug. 15, 2019 were active and volatile alongside stock with the notes down on an outright basis early in the session but gaining as stock rebounded off a 52-week low.

YY in focus

YY’s convertible notes remained in focus with the notes continuing to improve on Friday.

The Guangzhou, China-based global social media platform’s 1.375% convertible notes due 2026 were wrapped around 101 with stock off during Friday’s session.

The notes were improved about 0.25 point dollar-neutral, a market source said.

The 0.75% convertible notes due 2025 were changing hands around 101.625.

They gained another 0.5 point dollar-neutral.

YY’s ADSs traded as low as $68.38 on Friday before closing the day down $69.88, a decrease of 1.62%.

The notes were strong on their market debut on Thursday with the 1.375% convertible notes expanding 1.25 points dollar-neutral and the 0.75% convertible notes expanding 1 point, sources said.

Weibo gains again

Weibo’s 1.25% convertible notes due 2022 also remained in focus with the notes continuing to improve.

The notes traded up to 93.375 early in the session and were changing hands around 93.5 in the mid-afternoon, sources said.

After a 3-point expansion on Thursday, the notes were continuing to improve dollar-neutral, a market source said.

The bonds saw more than $15 million in reported volume by the mid-afternoon.

Weibo’s ADSs traded as low as $42.20 soon after the opening bell but pared their losses as the session progressed and closed the day at $43.27, an increase of 0.58%.

The social media company is the first China-based convertibles issuer to achieve an investment-grade rating.

Weibo plans to price a straight debt offering and was given an issuer credit rating of Baa1 from Moody’s Investors Service and a rating of BBB from S&P Global Ratings.

The ratings have “certainly piqued interest in the bonds,” a market source said.

Vonage improves

While volume was light, Vonage’s recently priced 1.75% convertible notes due 2024 were posting gains with the notes benefiting from the post-Federal Reserve bounce in the markets.

The 1.75% convertible notes were seen changing hands at 101.5 in the mid-afternoon.

They expanded 0.5 point over the past two sessions, a market source said.

Vonage stock closed Friday at $11.55, a decrease of 1.45%.

The 1.75% convertible notes were part of a wave of new deals that priced last week.

While trading activity calmed after an initial burst on their market debut on June 12, the 1.75% notes have maintained their initial dollar-neutral expansion, which sources pegged between 0.5 point to 1 point.

Herbalife volatile

Herbalife’s soon-to-mature 2% convertible notes due Aug. 18 were volatile on Friday with the notes beginning the day down but gaining as stock rebounded from its lows.

The 2% notes were changing hands around 101.5 early in the session with stock hitting a new 52-week low.

They rose to 104.5 in the mid-afternoon, sources said.

The notes were active with more than $8 million in reported volume.

Herbalife’s 2.625% convertible notes due 2024 were less active with the notes continuing to trade below par.

The 2.625% notes were changing hands around 93.375 on Friday, a source said.

Herbalife stock hit a new 52-week low early in Friday’s session.

Stock traded down to $40.75 early Friday before bouncing off its lows to close the day at $43.61, an increase of 5.72%.

While the overall market skyrocketed, Herbalife stock dropped to new lows on Wednesday and Thursday but broke its downward momentum on Friday afternoon.

Mentioned in this article:

Herbalife Nutrition Ltd. NYSE: HLF

Vonage Holdings Corp. NYSE: VG

Weibo Corp. Nasdaq: WB

YY Inc. Nasdaq: YY

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