Morning Commentary: Lucid convertible notes gain on new Saudi investment

By Abigail W. Adams

Portland, Me., March 25 – The convertibles primary market was dormant early Monday but is not expected to remain so for long with sources expecting a flurry of activity before the truncated holiday week in the United States draws to a close.

As market players awaited the reactivation of the primary market after a week-long hiatus, the secondary space was active with topical news jumpstarting trading activity.

Equity indexes were mixed early in the session with the Dow Jones industrial average down 122 points, or 0.31%, the S&P 500 index down 0.16%, the Nasdaq Composite index down 0.16% and the Russell 2000 index up 0.56% shortly before 11 a.m. ET.

There was $94 million in reported convertibles trading volume about one hour into the session with Lucid Group Inc.’s 1.25% convertible notes due 2026 dominating the tape.

The beleaguered 1.25% convertible notes made large gains following the most recent investment from a Saudi Public Investment Fund affiliate.

The 1.25% convertible notes jumped 8 to 9 points outright.

The notes were trading at 52.25 early in the session with the yield 27.25%.

There was $12 million in reported volume.

Lucid’s stock was trading at $2.99, an increase of 7.94%, shortly before 11 a.m. ET.

Lucid’s capital structure was on the rise following news that Saudi investment fund affiliate Ayar Third Investment Co. will purchase an additional $1 billion of convertible preferred stock in a private placement.

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