Morning Commentary: Convertibles secondary market active; DISH, iQIYI trade below par

By Abigail W. Adams

Portland, Me., Dec. 18 – The convertibles secondary space was active early Friday with more than $100 million on the tape less than one hour into the session.

DISH Network Corp.’s 0% convertible notes due 2025 and iQIYI Inc.’s 4% convertible notes due 2026 remained active with both issues trading below par their second day in the secondary space – a break in a recent trend that has seen new paper skyrocket in the aftermarket.

DISH’s 0% convertible notes due 2025 were changing hands at 99 early in the session with more than $8 million in reported volume.

DISH’s stock was trading at $31.01, a decrease of 1.31%, shortly before 11 a.m. ET.

The 0% notes “never saw an upside,” a source said.

The $2 billion issue traded below par and contracted dollar-neutral on their aftermarket debut on Thursday.

iQIYI’s 4% convertible notes due 2026 remained volatile with an early print as high as 100.25.

However, the notes were largely trading on a 99-handle.

The print above par was most likely the result of underwriters supporting the deals, a source said.

iQIYI’s ADSs were changing hands at $17.58, an increase of 1.32%, shortly before 11 a.m. ET.

The 4% notes were also volatile on their aftermarket debut on Thursday and traded in a range of 99 to 102.

While volatile on an outright basis, the notes expanded dollar-neutral.

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