Morning Commentary: Virgin Galactic struggles; Palo Alto active in quiet secondary

By Abigail W. Adams

Portland, Me., Jan. 18 – It was a quiet start to the day in the convertibles secondary space as the rout in Treasury and equity markets resumed.

The Dow Jones industrial average was down 527 points, or 1.47%, the S&P 500 index was down 1.52%, the Nasdaq Composite was down 1.79% and the Russell 2000 index was down 1.83% shortly before 11 a.m. ET.

The 10-year Treasury yield shot up to a two-year high of 1.85% shortly before 11 a.m. ET.

However, the convertibles secondary space was quiet in the return from the long weekend with $64 million in reported volume.

“Everything’s holding,” a source said. “Nothing’s really moved.”

Virgin Galactic Holdings Inc.’s 2.5% convertible notes due 2027 continued to trade down on an outright basis alongside stock.

The 2.5% notes were changing hands at 97.25 early in the session.

Stock again hit a new 52-week low of $9.46 and was at $9.50, a decrease of 6.31%, shortly before 11 a.m. ET.

Meanwhile, Palo Alto Networks Inc.’s 0.75% convertible notes due 2023 were among the most actively traded notes early in the session with stock in positive territory.

The 0.75% notes rose about 6 points outright with stock up more than 2%.

The notes were changing hands at 195 early in the session.

The short-duration notes were moving in line to slightly improved, a source said.

Palo Alto’s stock was trading at $514.82, an increase of 3.15%, shortly before 11 a.m. ET.

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