Morning Commentary: Innoviva convertibles active; Okta down outright in early trading

By Abigail W. Adams

Portland, Me., March 22 – It was another slow start to the day in the convertibles secondary space with the primary market dormant for more than one week.

There are whisperings about some wall-crossed deals in the works, sources said. However, with markets still volatile, potential issuers may be waiting for more stability before launching offerings.

However, with equity markets opening Tuesday with strong gains, sources do expect to see some new paper before the week is through.

The Dow Jones industrial average was up 243 points, or 0.69%, the S&P 500 index was up 0.99%, the Nasdaq Composite was up 1.68% and the Russell 2000 index was up 1.15% shortly before 11 a.m. ET.

There was $62 million in reported convertible bond trading volume about one hour into the session.

Innoviva Inc.’s 2.125% convertible notes due 2028, one of the three convertible bond deals to price in March, were the most actively traded issue early in the session.

The notes were largely unchanged outright.

They were changing hands at 98.5 versus a stock price of $18.77 early in the session.

There was $5 million in reported volume.

Innoviva’s stock was trading at $18.52, a decrease of 0.054%, shortly before 11 a.m. ET.

Okta Inc.’s 0.125% convertible notes due 2025 were down on an outright basis in early trading.

However, the notes were in line to slightly better on hedge, a source said.

The 0.125% notes were changing hands at 109.875 versus a stock price of $157.86 early in Tuesday’s session.

Okta’s stock traded as low as $154.45 early in the session but pared losses to trade at $165.23, a decrease of 2.47%, shortly before 11 a.m. ET.

Stock was under pressure after reports surfaced early Tuesday the company was investigating a potential data breach.

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