Convertibles trading light; China-based convertibles in focus; DISH Network active

By Abigail W. Adams

Portland, Me., July 2 – Trading activity in the convertibles secondary space was slow on Tuesday with business winding down in the run up to the July 4th holiday.

While few names saw concentrated trading activity, the convertible notes of China-based corporations were again in focus with iQIYI Inc.’s 2% convertible notes due 2025 and Bilibili Inc.’s 1.375% convertible notes due 2026 among the major volume movers of the day.

The notes continued to improve even as broader markets wavered with optimism surrounding the impact of a trade truce between the United States and China diminishing.

Nio Inc.’s 4.5% convertible notes due 2024 were also active with the notes gaining on an outright basis.

Outside of trade war trades, DISH Network Corp.’s 3.375% convertible notes due 2026 were active with the notes improved on news the satellite broadcaster had reached an agreement to buy some of T-Mobile’s assets.

The Asian space

The convertible notes of China-based corporations were again in focus on Tuesday with many of the issues improving even as equities waned as optimism surrounding the trade war truce diminished.

iQIYI’s 2% convertible notes due 2025 were again major volume movers on Tuesday.

The notes gained about 0.5 point outright with the Beijing-based online entertainment service provider’s equity up more than 2%.

The 2% notes were changing hands around 99.5 on Tuesday. iQIYI’s ADSs closed the day at $21.19, an increase of 2.22%.

The notes have been in focus and posting gains since Monday with the notes briefly trading above par for the first time since May when trade negotiations with China fell apart.

Bilibili’s 1.375% convertible notes were also active with the notes making gains on an outright basis.

The 1.375% convertible notes traded just shy of 97.5 Tuesday afternoon, according to a market source.

They were up about 1 point from Monday’s close.

The Shanghai-based online entertainment company’s ADSs closed Tuesday at $16.61, an increase of 0.79%.

Nio gains outright

Nio’s 4.5% convertible notes due 2024 were also active although the notes were not fairing as well as other issues from China-based corporations.

The 4.5% notes were changing hands at 50 early in the session and rose to 51.625 in the afternoon as the company’s equity surged, sources said.

The Shanghai-based electric car manufacturer ADSs were on the rise on Tuesday. The ADSs traded as low as $2.57 and as high as $2.845 before closing the day at $2.82, an increase of 8.46%.

While the notes posted gains, they are still a distressed situation, a market source said.

Nio priced a $650 million issue of the 4.5% notes in January when the company’s ADSs were trading at $7.46.

The notes have been one of the worst performers of the deals to price in 2019, a source said.

DISH active

DISH Network’s 3.375% convertible notes due 2026 saw renewed attention on Tuesday as news broke the company had reached an agreement with T-Mobile to buy some of its assets.

The 3.375% convertible notes were up about 0.5 point outright. They traded up to 98.5 early in the session and stood poised to close the day at 98.375, sources said.

DISH stock spiked soon after the opening bell on news T-Mobile and DISH had reached a deal on the sale of T-Mobile assets.

DISH stock traded as high as $41.18 on Tuesday before closing the day at $39.17, an increase of 0.8%.

DISH’s deal with T-Mobile would make DISH a new wireless service provider, which regulators said they would need in order to approve T-Mobile’s merger with Sprint, CNBC reported.

However, the Department of Justice is reportedly pushing T-Mobile to divest more to DISH in the asset sale.

Mentioned in this article:

Bilibili Inc. Nasdaq: BILI

DISH Network Corp. Nasdaq: DISH

iQIYI Inc. Nasdaq: IQ

Nio Inc. NYSE: NIO

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.