Morning Commentary: Sea convertible notes active, continue to dominate secondary market

By Abigail W. Adams

Portland, Me., Oct. 14 – It was an active morning in the convertibles secondary space on a strong day for equities with a risk-on sentiment returning to markets on the heels of positive earnings and a slipping 10-year Treasury yield, which was hovering around 1.529% shortly before 11 a.m. ET.

The Dow Jones industrial average was up 484 points, or 1.39%, the S&P 500 index was up 1.37%, the Nasdaq Composite was up 1.36% and the Russell 2000 index was up 1.31% shortly before 11 a.m. ET.

There was about $200 million in reported volume a little over one hour into the session.

However, there was a wide breadth to the names that did trade with few seeing concentrated trading activity.

Sea Ltd.’s 0.25% convertible notes due 2026 continued to dominate activity in the space although the notes were largely unchanged.

The 0.25% notes continued to trade on a 105-handle early in Thursday’s session with the company’s equity largely flat.

Sea’s American Depositary Shares were changing hands at $348.72, a decrease of 0.18%, shortly before 11 a.m. ET.

The notes hit their highest outright level on Wednesday as the company’s ADRs touched their highest level since the notes priced.

However, the notes lagged slightly on the move up, a source said.

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