Morning Commentary: Trading thin; Hope Bancorp convertibles active, drop with stock

By Abigail W. Adams

Portland, Me., Oct. 22 – The convertibles secondary space opened the week with light trading volume. There was about $40 million on the tape early Monday with few names seeing more than $3 million in trades, a market source said.

Hope Bancorp. Inc.’s 2% convertible notes due 2038 were among the most active on the tape with the notes dropping outright as stock hit a new 52-week low. The notes were changing hands at 88.5 with a yield to worst of 4.84%, a market source said.

Stock was down 1.88% to $14.12 early in the session. While a low vol. stock, it has trended downwards since releasing its third-quarter earnings report on Oct. 16. Earnings were in line with the consensus estimate of earnings per share of 36 cents for the third quarter.

The holding company for Bank of Hope, the only regional Korean-American bank in the United States, also announced a dividend of 14 cents and a $50 million share buyback program.

However, several analysts have lowered their year-end earnings estimate for the financial institution since the earnings report was released.

Hope priced $217.5 million of the 2% convertible notes at par in May.

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