Ventas, American Water exchangeables hit new heights; LivePerson outperforms; Airbnb up

By Abigail W. Adams

Portland, Me., July 12 – The convertibles primary market remained dormant as expected on Wednesday with the big banks set to launch earnings season later in the week.

However, the secondary space saw a notable uptick in activity with buyers reemerging on the heels of a Consumer Price Index report, which reflected the slowest pace of inflation since 2021.

Bond yields plunged while stocks rallied as markets dialed back their bets on Fed rate increases post-July.

Equity indexes rallied strongly early in the session but lost steam to close well off the highs of the day with the Dow Jones industrial average up 86 points, or 0.25%, the S&P 500 index up 0.74%, the Nasdaq Composite index up 1.15% and the Russell 2000 index up 1.03%.

The two-year Treasury yield fell 12.6 basis points to 4.75% and the 10-year Treasury yield fell 11.2 bps to 3.862% after hitting as high as 5.11% and 4.08%, respectively, following the ADP employment report last Thursday.

There was $103 million in reported convertibles trading volume about one hour into the session and $750 million on the tape about one hour before the market close.

Investment-grade convertible notes were lifted amid the move in Treasuries with both American Water Capital Corp.’s 3.625% exchangeable notes due 2026 (Baa1/A-) and Ventas Realty, LP’s 3.75% exchangeable notes due 2026 (Baa1/BBB+) hitting new outright heights.

However, LivePerson Inc.’s 0% convertible notes due 2026 were the outperformers of Wednesday’s session with the notes skyrocketing on news of a CEO transition.

Airbnb Inc.’s 0% convertible notes due 2026 were improved in active trade on Wednesday.

New heights

American Water’s 3.625% exchangeable notes due 2026 and Ventas’ 3.75% exchangeable notes due 2026 hit new heights in heavy volume on Wednesday as Treasuries reversed course with yields plummeting after hitting a multi-year high last Thursday.

Ventas’ 3.75% exchangeable notes were the most actively traded issue in the secondary space.

The notes hit new outright heights in heavy volume early in the session.

However, the notes came in alongside stock as the session progressed.

The 3.75% notes gained 1 point outright to break above a 103-handle in early trade.

The exchangeables were trading just shy of 104 versus a stock price of $49.37 early in the session, according to a market source.

However, the notes came in as stock dipped into negative territory as the session progressed with the notes trading at 102.75 versus a stock price of $48.74 late in the session.

There was $50 million in reported volume.

Ventas’ stock traded to a low of $48.28 and a high of $49.50 before closing at $48.31, off 0.98%.

American Water’s 3.625% notes gained 1.5 points outright with stock up about 3%.

They were changing hands at 101.875 versus a stock price of $145.74 in the late afternoon, according to a market source.

There was $41 million in reported volume.

American Water’s stock traded to a low of $142.68 and a high of $145.96 before closing at $145.44, an increase of 2.06%.

Both issues are set to enter the Refinitiv Convertible Indices on Thursday.

LivePerson outperforms

LivePerson’s 0% convertible notes due 2026 were the outperformers of Wednesday’s session with topical news and the strength of the market propelling the notes to their highest level since March.

The 0% notes gained 7 points outright to trade up to a 71-handle.

The notes were seen at 71.5 with a yield of 10% in the late afternoon, according to a market source.

There was $6 million in reported volume.

While the notes are not equity sensitive, LivePerson’s stock jumped double digits to close Wednesday at $5.07, an increase of 19.01%.

The AI software company’s capital structure was on the rise after the company announced a leadership transition.

LivePerson’s current CEO will leave his post at the end of his contract in December with the company planning to hire a new CEO to help capitalize its AI products and platforms, according to a company news release.

Wednesday marked the highest level for LivePerson’s 0% convertible notes since mid-March when the notes plunged to the low 60s on an earnings disappointment.

The notes last traded at 64.375 in mid-June, according to Trace data.

Airbnb edges higher

Airbnb’s 0% convertible notes due 2026 improved in active trade on Wednesday.

The notes gained about 0.25 point outright with stock off slightly.

The notes were changing hands at 88.125 versus a stock price of $136.82 in the late afternoon, according to a market source.

There was $14 million in reported volume.

Airbnb’s stock traded to a high of $140.32 and a low of $135.52 before closing at $137.02, down 0.38%.

Mentioned in this article:

American Water Works Co. Inc. NYSE: AWK

Airbnb Inc. Nasdaq: ABNB

LivePerson Inc. Nasdaq: LPSN

Ventas Inc. NYSE: VTR

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.