Morning Commentary: Wayfair convertible bonds improve; Rivian notes pop; NIO higher

By Cristal Cody

Tupelo, Miss., Sept. 26 – Wayfair Inc.’s convertible notes climbed in early trading on Tuesday, while its stock moved lower as the online retailer faces bankruptcy chatter.

The 0.625% convertible notes due 2025 rose over 0.5 point in the morning’s strongest-traded issue.

Rivian Automotive, Inc. saw the biggest gains about an hour into the session with its 4.625% convertible notes due 2029 around 5 points higher and the company’s equity over 6% better on an analyst upgrade.

Overall secondary trading in the convertibles space was picking up with $131.95 million of reported volume over an hour into the session Tuesday. On Monday, the market saw $108 million of reported volume in early trading.

Stocks slid as the session got underway as the market digested mixed economic data releases.

The S&P 500 index slid 1.19%, the Dow Jones industrial average dropped 0.95%, the Nasdaq declined 1.22% and the Russell 200 index fell 0.36%.

In new issues, NIO Inc.’s notes also were among the morning’s strongest gainers in the convertibles market.

The 4.625% convertible senior notes due 2029 traded more than 2.25 points higher.

Wayfair up

Wayfair’s 0.625% convertible notes due 2025 rose over 0.5 point to 86.375 versus an equity price of $57.98 in the morning’s strongest-traded issue, a source said.

Volume totaled $5 million.

Wayfair’s shares were down 2.34% an hour into trading on Tuesday at $57.94.

The retailer has come under reported bankruptcy chatter over the past few days on lackluster earnings so far this year and mixed analyst recommendations.

Rivian jumps

Rivian Automotive’s 4.625% convertible notes due 2030 traded around 5 points higher at a print of 137.137 versus a stock price of $22.55 early Tuesday, a source said.

The issue was among the morning’s top traded convertible bonds on $4 million of reported volume.

Rivian Automotive’s stock traded 6.67% higher over the morning at $22.53 following an upbeat analyst report from Robert W. Baird.

NIO gains

NIO’s new 4.625% convertible senior notes due 2029 traded more than 2.25 points higher early Tuesday at 100.583 versus an equity price of $8.52, a source said.

Trading totaled $2.1 million.

NIO priced $500 million of the notes at par on Sept. 19 as part of a $1 billion two-tranche deal.

NIO’s American Depositary Shares traded 2.41% better by late morning at $8.55.

Shares closed Monday down 2.11% after the company came under pressure on news reports that it had denied plans for another capital raise.

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