Morning Commentary: NextEra Energy convertible notes improve; LivePerson crumbles

By Abigail W. Adams

Portland, Me., Feb. 29 – The convertibles primary market appeared closed for the week after another high-volume week for new issuance with $1.95 billion pricing in three deals.

The influx of new paper sparked heavy trading activity in the aftermarket with Wednesday marking the highest volume session in more than one year, a source said.

However, activity surrounding recent issues settled on Thursday with trading volumes returning to average on a strong day for markets.

Equity indexes were mixed early Thursday as markets digested the latest Consumer Price Expenditure report, which came in largely as expected.

The Dow Jones industrial average was down 46 points, or 0.12%, the S&P 500 index was up 0.22%, the Nasdaq Composite index was up 0.55% and the Russell 2000 index was up 1.13% shortly before 11 a.m. ET.

There was $112 million in reported convertibles trading volume about one hour into the session with activity concentrated in NextEra Energy Capital Holdings Inc.’s 3% convertible notes due 2027 (Baa1/BBB+).

The 3% convertible notes improved their second day in the secondary space after falling flat on their trading debut.

Earnings also continued to spark large price movements with LivePerson Inc.’s 0% convertible notes due 2026 falling further into distressed territory after a large earnings miss.

NextEra improves

NextEra’s 3% convertible notes due 2027 improved in heavy volume after a largely flat trading debut.

The 3% convertible notes climbed about 0.375 point outright with stock notching nominal gains early in the session.

The notes were changing hands just shy of 100.5 versus a stock price of $55.50 early in the session, according to a market source.

There was $38 million in reported volume.

NextEra’s stock was trading at $55.28, an increase of 0.44%, shortly before 11 a.m. ET.

LivePerson sinks

LivePerson’s 0% convertible notes due 2026 sank further into distressed territory as stock collapsed after a large earnings miss.

The 0% convertible notes were down 5 points outright with stock off more than 40%.

They were trading at 63 versus a stock price of $1.46 early in the session with the yield about 17.375%, a source said.

There was $5 million in reported volume.

LivePerson’s stock was changing hands at $1.42, a decrease of 40.63%, shortly before 11 a.m. ET.

Stock collapsed after the technology company reported losses per share of 10 cents versus the loss per share of 5 cents expected.

However, the company posted a revenue beat of $95.47 million versus the $94.37 million expected.

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