Morning Commentary: Nio’s new convertibles remain contracted; Tesla notes active

By Abigail W. Adams

Portland, Me., Feb. 1 – The convertibles secondary space was quiet early in Friday’s session with Nio Inc.’s 4.5% convertible notes due 2024 continuing to dominate trading activity.

The 4.5% notes were settled around 99 early Friday after seeing wild swings on their market debut on Thursday.

The notes were volatile on Thursday with some prints as high as 103 and others as low as 96.5, sources said.

However, the notes appeared to solidify at the 99 level in early trading on Friday. They remained contracted on a dollar-neutral basis with Nio stock continuing to rise.

Nio stock traded as high as $8.10 soon after the opening bell on Friday but was unchanged at $7.88 shortly before 11 a.m. ET.

Despite the low trading level of the convertible notes, Nio stock has posted gains since the convertible notes priced, climbing 5.63% on Thursday.

The financing was a positive for the Shanghai-based electric car manufacturer, a market source said.

Outside of Nio’s new convertible notes, few names saw concentrated trading activity.

Tesla Inc.’s 0.25% convertible notes due March 1 were active early Friday with the notes continuing to trade at par.

Tesla stock was on the rise on Friday, trading up to $313.00, an increase of 1.95%.

News that Tesla had begun taking orders in China for a cheaper version of Model 3 sedans helped lift the stock, which was largely flat following the electric car manufacturer’s fourth-quarter earnings report.

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