DISH convertibles in focus, hit new highs; Airbnb notes down outright, up dollar-neutral

By Abigail W. Adams

Portland, Me., April 21 – The convertibles primary market remained dormant on Wednesday with the week shaping up to be the first in 2021 with no new deals.

Meanwhile, the secondary space saw an uptick of activity despite the lack of new paper in the market.

The tone in the market improved as equity benchmarks snapped their two-day losing streak and closed the day in positive territory.

Small cap and tech stocks outperformed on Wednesday with the Russell 2000 closing the day up 2.35% and the tech-heavy Nasdaq closing the day up 1.19%.

The S&P 500 index finished up 0.93% and the Dow Jones industrial average closed the day up 316 points, or 0.93%.

DISH Network Corp.’s 0% convertible notes due 2025 dominated the tape with the notes hitting their highest outright level since pricing and making large gains dollar-neutral as stock broke out to a new 52-week high.

Travel names were active with the majority making gains on an outright basis although they were largely unchanged dollar-neutral.

Southwest Airlines Co.’s 1.25% convertibles due 2025 and JetBlue Airways Corp.’s 0.5% convertible notes due 2026 were among the travel names to actively trade on Wednesday.

While travel names improved alongside their stock on Wednesday, Airbnb Inc.’s 0% convertible notes due 2026 continued to trade down on an outright basis.

However, the notes improved dollar-neutral as stock remained under pressure.

DISH’s new heights

DISH Network’s 0% convertible notes due 2025 dominated the tape on Wednesday as the notes hit their highest outright level since pricing and made large gains dollar-neutral.

The 0% convertible notes gained more than 10 points outright.

They started the day at 106.5 and were changing hands at 116.25 in the late afternoon, a source said.

The notes pushed out 1 point dollar-neutral.

The bonds saw more than $50 million in reported volume.

DISH’s stock traded to a low of $37.30 and a high of $41.70 before closing the day at $40.94, an increase of 10.98%.

Stock set a new 52-week high in intraday activity.

DISH’s stock popped after the company announced it was partnering with Amazon Web Services to build out its 5G network.

DISH’s 0% convertible notes have seen a dramatic turnaround since the company priced the $2 billion issue in early December 2020.

While the notes traded below par for most of January and February, they have been on an upward trend since March.

Airlines on the move

The convertible notes of airlines were active on Wednesday although they were little changed dollar-neutral, sources said.

Southwest Airlines’ 1.25% convertibles due 2025 gained about 2 points outright with stock up more than 3%.

They were changing hands at 171.375 in the late afternoon.

Southwest Airlines’ stock traded to a low of $58.91 and a high of $62.07 before closing the day at $62.04, an increase of 3.66%.

JetBlue’s 0.5% convertible notes due 2026 gained about 2 points outright with stock up more than 3%.

The notes were changing hands at 108.625 heading into the market close.

JetBlue’s stock traded to a high of $19.95 and a low of $18.77 before closing the day at $19.91, an increase of 3.21%.

Travel stocks were rebounding alongside the broader markets on Wednesday after spiking Covid-19 cases drove them lower the previous session.

Airbnb active

While travel stocks were rebounding on Wednesday, Airbnb’s stock continued to trend lower.

However, the online vacation rental company’s 0% convertible notes due 2026 were looking better to buy, a source said.

The notes were down about 1 point outright with stock off a little more than 1%.

The 0% notes were changing hands at 97.875 versus a stock price of $166.95 early in the session.

They continued to trade around the 97 level in the late afternoon.

They improved about 0.25 point dollar-neutral, a source said.

Airbnb’s stock traded to a high of $170.32 and a low of $164.12 before closing the day at $167.07, a decrease of 1.47%.

Mentioned in this article:

Airbnb Inc. Nasdaq: ABNB

DISH Network Corp. Nasdaq: DISH

JetBlue Airways Corp. Nasdaq: JBLU

Southwest Airlines Co. NYSE: LUV

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