Morning Commentary: New paper active on quiet morning in convertibles secondary

By Abigail W. Adams

Portland, Me., Sept. 11 – The convertibles primary market was quiet early Monday with no deals launching pre-open.

However, the calendar remains robust and market sources expect the primary to remain active in the coming week after unleashing $4.395 billion over seven deals the previous week.

The new paper remained active on an otherwise quiet day in the secondary space with equities notching gains ahead of the release of a key piece of inflationary data.

The Dow Jones industrial average was up 78 points, or 0.23%, the S&P 500 index was up 0.38%, the Nasdaq Composite index was up 0.58% and the Russell 2000 index was up 0.64% shortly before 11 a.m. ET.

All eyes will be on the Consumer Price Index report slated for release on Wednesday as markets attempt to gauge the Fed’s next move.

There was $71 million in reported volume about one hour into the session with Corporate Office Properties Trust’s 5.25% exchangeable notes due 2028 (Baa3/BBB-), Advanced Energy Industries Inc.’s 2.5% convertible notes due 2028 and Seagate HDD Cayman’s 3.5% exchangeable notes due 2028 among the most active issues on the tape.

The notes were little changed in early trade with the new paper holding onto the strong gains made on debut.

Corporate Office Properties’ 5.25% notes due 2028 were changing hands at 103 versus a stock price of $25.51 early in the session, according to a market source.

There was $10.5 million in reported volume.

Corporate Office’s stock was trading at $25.10, a decrease of 1.14%, shortly before 11 a.m. ET.

Advanced Energy’s 2.5% notes due 2028 gained 1 point outright with stock up about 1%.

The notes were seen at 101.75 versus a stock price of $105.25 early in the session.

There was $4 million in reported volume.

Advanced Energy’s stock was trading at $105, an increase of 0.85%, shortly before 11 a.m. ET.

Seagate’s 3.5% notes due 2028 were changing hands at 101.875 versus a stock price of $65.11.

There was $4 million in reported volume.

Seagate’s stock was trading at $64.43, down 1.44%, shortly before 11 a.m. ET.

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