Morning Commentary: Luckin Coffee convertibles continue to dominate; Nio adds to gains

By Abigail W. Adams

Portland, Me., Jan. 17 – The convertibles secondary space rounded out an active week on firm footing with several China-based convertible issuers seeing major gains on the week.

Luckin Coffee Inc.’s 0.75% convertible notes due 2025 continued to dominate activity in the secondary space with the notes again on the rise.

The 0.75% notes jumped to trade north of 115 early in Friday’s session with more than $30 million in reported volume.

The Beijing-based coffee shop chain’s ADS also continued their upward momentum and traded as high as $50.57, an increase of 4.33% shortly before 11 a.m. ET.

Luckin Coffee’s convertible notes have skyrocketed since pricing late last week.

Nio Inc.’s 4.5% convertible notes due 2024 also continued their upward momentum on Friday.

The 4.5% notes traded as high as 67 early in the session. They began the week trading at 49.

Nio’s equity also continued to gain on Friday.

The Shanghai-based electric car manufacturer’s ADS traded up to $4.64, an increase of 6.18%, shortly before 11 a.m. ET.

Shares were continuing to gain following news the struggling carmaker may receive a cash infusion of $1 billion from China automaker GAC Group, which will cover its cash flow needs through 2020.

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