Everbridge skyrockets on acquisition; solar stocks take a hit, Sunnova, Enphase lower

By Abigail W. Adams

Portland, Me., Feb. 5 – The convertibles primary market was dormant on Monday with the secondary space also quiet as volatility returned to markets.

Equity indexes fell while Treasury yields soared as markets digested Federal Reserve chair Jerome Powell’s “60 Minutes” interview.

Powell continued to stress Fed officials’ commitment to caution and patience before engaging in rate cuts, which pointed to an overshoot in market expectations.

The Dow Jones industrial average closed Monday down 274 points, or 0.71%, the S&P 500 index closed down 0.32%, the Nasdaq Composite index closed down 0.20% and the Russell 2000 index closed down 1.3%.

The 10-year Treasury yield climbed 13.9 basis points to close the day at 4.162%.

There was $42 million in reported convertible bond trading volume about one hour into the session and $349 million about one hour before the market close with investment-grade trades continuing to dominate the tape.

CenterPoint Energy Inc.’s 4.25% convertible notes due 2026 (Baa2) were among the top traded issues of the session with the notes weaker amid the move in Treasuries.

While the secondary space was largely quiet, topical and earnings-related news sparked some large movements.

Everbridge Inc.’s convertible notes skyrocketed on Monday following news private equity firm Thoma Bravo would acquire the company for $1.5 billion.

Lucid Group Inc.’s 1.25% convertible notes due 2026 were slightly weaker in active trade.

CenterPoint weaker

CenterPoint’s 4.25% convertible notes due 2026 were the investment-grade name of the day on Monday with the notes slightly weaker in active trade.

The 4.25% notes were off about 0.25 point outright.

The notes were trading at 99.375 versus a stock price of $27.94 early in the session, according to a market source.

They were changing hands at 99.5 versus a stock price of $27.67 in the late afternoon.

There was $19 million in reported volume.

CenterPoint’s stock traded to a low of $27.44 and a high of $27.88 before closing at $27.53, off 1.5%.

Everbridge’s acquisition

Everbridge’s convertible notes soared in heavy volume on Monday after private equity firm Thoma Bravo announced it would acquire the company in a deal valued at $1.5 billion.

Everbridge’s 0% convertible notes due 2026 jumped 10 points outright.

The notes were trading at 97.375 in the late afternoon, a source said.

The notes trade on a light hedge.

While outright accounts were the major winners from the move, hedge accounts still made large gains, a source said.

There was $17 million in reported volume.

Everbridge’s 0.125% convertible notes due Dec. 15, 2024 jumped 6 points outright to also trade on a 97-handle, a source said.

There was $5 million in reported volume.

Everbridge’s stock traded to a low of $28.05 and a high of $28.25 before closing at $28.17, up 18.41%.

Thoma Bravo will acquire the company in an all-cash transaction for $28.60 per share with the deal expected to close in the second quarter.

The convertible notes will be taken out in the transaction, a source said.

Lucid active

Lucid’s beleaguered 1.25% convertible notes due 2026 were slightly weaker in active trade on Monday.

The 1.25% notes shaved off about 0.25 point outright.

They were trading at 39.75 with the yield now 37.25%, according to a market source.

There was $12 million in reported volume.

Lucid’s stock traded to a high of $3.30 and a low of $3.12 before closing at $3.22, a decrease of 2.72%.

Lucid’s convertible notes saw some selling pressure on Monday with market expectations for the EV maker low heading into earnings.

Lucid’s stock sank 15% over the past month after the company missed expectations with fourth-quarter deliveries.

The company is scheduled to report earnings on Feb. 21.

Mentioned in this article:

CenterPoint Energy Inc. NYSE: CNP

Everbridge Inc. Nasdaq: EVBG

Lucid Group Inc. Nasdaq: LCID

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