Prospect Capital, JetBlue convertibles active; Freshpet adds; Norwegian Cruise lower

By Abigail W. Adams

Portland, Me., April 21 – The convertibles secondary space closed the week as it began – quietly.

Friday marked another uneventful day in the secondary space with the slew of earnings released thus far giving little guidance to markets that have been struggling to find direction.

Equity indexes remained either side of unchanged throughout the session with the Dow Jones industrial average closing up 22 points, or 0.07%, the S&P 500 index closing up 0.09%, the Nasdaq Composite index closing up 0.11% and the Russell 2000 index closing up 0.10%.

There was $40 million in reported volume about one hour into the session and $300 million on the tape about one hour before the market close.

Investment-grade issues were again the top volume movers although Friday’s session saw an off-the-run investment-grade issue make an appearance on the tape.

Prospect Capital Corp.’s 6.375% convertibles due 2025 (Baa3/BBB-) were in focus on Friday as the company’s stock prepares to trade ex-dividend.

Prepositioning for upcoming earnings also sparked activity in outstanding issues with JetBlue Airways Corp.’s 0.5% convertible notes due 2026 and NCL Corp. Ltd.’s 2.5% exchangeable notes due 2027 for Norwegian Cruise Line Holdings Ltd. active.

While JetBlue’s 0.5% convertible notes were largely unchanged, NCL Corp.’s 2.5% notes were weaker.

Freshpet Inc.’s 3% convertible notes due 2028 saw renewed attention with the notes, which have been one of the most successful new issues of 2023, again on the rise.

Prospect Capital in focus

Prospect Capital’s 6.375% convertible notes due 2025 were among the top volume movers of Friday’s session as the company’s stock prepares to trade ex-dividend.

While active, the 6.375% convertible notes due 2025 saw little movement in price with round-lot prints remaining in the 97.75 to 97.875 context, a source said.

The yield was about 7.625%.

However, there were some smaller retail trades as high as par.

There was $10 million in reported volume with the majority of activity occurring early in the session.

Prospect Capital’s stock traded to a low of $6.78 and a high of $6.88 before closing at $6.87, an increase of 0.73%.

The company announced recently it would pay a monthly dividend of 6 cents on April 24 with stock going ex-dividend on April 25.

Earnings eyed

Prepositioning leading into earnings sparked activity in some outstanding issues with JetBlue’s 0.5% convertible notes due 2026 and NCL Corp.’s 2.5% exchangeable notes due 2027 active.

JetBlue’s 0.5% convertible notes were largely unchanged.

The notes were changing hands at 77.875 versus a stock price of $6.84 in the late afternoon, according to a market source.

There was $11 million in reported volume.

JetBlue’s stock traded to a low of $6.76 and a high of $6.94 before closing at $6.92, an increase of 2.06%.

The airline is expected to report earnings on Tuesday.

NCL Corp.’s 2.5% exchangeable notes due 2027 continued to lose steam with the notes off another 0.75 point outright to return to a 73-handle.

They were trading at 73.75 versus a stock price of $12.59 early in the session, according to a market source.

There was $5 million in reported volume.

Norwegian Cruise Line’s stock traded to a low of $12.44 and a high of $13.08 before closing at $13.04, an increase of 3.16%.

The notes were active after Norwegian Cruise Line announced it would release earnings on May 1.

Freshpet adds

Freshpet’s 3% convertible notes due 2028 saw renewed attention on Friday with the notes resuming their uptrend after pulling back over the past two sessions.

The notes climbed about 2.5 points outright with stock up about 1.5%.

The convertibles were trading at 116.375 versus a stock price of $64.89 in the late afternoon.

There was $9 million in reported volume.

Freshpet’s stock traded to a low of $63.06 and a high of $65.36 before closing at $65.01, up 2.17%.

The 3% notes have made outsized gains in the secondary space since the $402.5 million issue priced at par on March 15.

Mentioned in this article:

Freshpet Inc. Nasdaq: FRPT

JetBlue Airways Corp. Nasdaq: JBLU

Norwegian Cruise Line Holdings Ltd. NYSE: NCLH

Prospect Capital Corp. Nasdaq: PSEC

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