High-grade convertibles return to focus, improve; MicroStrategy higher; Coinbase gains

By Abigail W. Adams

Portland, Me., March 11 – The convertibles primary market was quiet on Monday after marking the highest volume week since 2021 the previous week.

The convertibles primary market is expected to continue to operate at an active pace throughout the week although Tuesday’s release of the Consumer Price Index report, which has the making of a high vol. event, may have been an obstacle to a Monday announcement, sources said.

Meanwhile, trading activity in the secondary space returned to average as activity surrounding the deluge of deals from the previous week settled.

Equity indexes were weak at the open but turned mixed by the close with all eyes on the latest inflationary data, which will test market expectations for the start of rate cuts.

The Dow Jones industrial average closed Monday up 47 points, or 0.12%, the S&P 500 index closed down 0.11%, the Nasdaq Composite index closed down 0.41% and the Russell 2000 index closed down 0.80%.

There was $83 million in reported convertible bond trading volume about one hour into the session and $522 million on the tape about one hour before the market close with high-grade names again driving activity.

NextEra Energy Capital Holdings Inc.’s recently priced 3% exchangeable notes due 2027 (Baa1/BBB+) and Global Payments Inc.’s 1.5% convertible notes due 2031 (Baa3/BBB-) remained the top traders in the space with both improved in the heavy volume.

Federal Realty OP LP’s 3.25% exchangeable notes due 2029 were also active with the notes notching nominal gains.

Bitcoin’s new all-time high lifted crypto-exposed convertible notes with MicroStrategy Inc.’s convertible notes continuing their meteoric rise as stock hit a new 52-week high.

Coinbase Global, Inc.’s 0.5% convertible notes due 2026 also made large gains in active trade on Monday.

Gainers

NextEra’s recently priced 3% exchangeable notes due 2027 continued to improve in heavy volume on Monday after a relatively flat aftermarket debut.

The 3% notes inched up about 0.25 point outright with stock off during Monday’s session.

The 3% notes were changing hands at 102.5 versus a stock price of $57.81 early in the session, according to a market source.

They were trading at 102.25 versus a stock price of $57.57 in the late afternoon.

There was $42 million in reported volume.

NextEra’s stock traded to a low of $56.89 and a high of $58.14 before closing at $57.87, up 0.10%.

Global Payments’ 1.5% convertible notes due 2031 were also improved in heavy volume after their addition to the Refinitiv convertible indices.

The 1.5% notes added about 1 point outright with stock up 0.5%.

They were trading at 103.25 versus a stock price of $130.15 in the late afternoon, a source said.

There was $42 million in reported volume.

Global Payments’ stock traded to a low of $129.48 and a high of $130.47 before closing at $130.26, an increase of 0.49%.

Federal Realty’s 3.25% exchangeable notes due 2029 were also improved.

The notes added about 0.25 point outright with stock in the red to start the session although stock popped into positive territory by the close.

The 3.25% notes were changing hands at 97.25 versus a stock price of $102.49 early in the session, according to a market source.

There was $12 million in reported volume.

Federal Realty’s stock traded to a low of $101.40 and a high of $102.77 before closing at $102.76, an increase of 0.68%.

The Bitcoin bulls

Bitcoin continued to lift crypto-exposed convertible notes as it blasted to new heights on Monday.

MicroStrategy’s convertible notes continued their meteoric rise as stock hit a new 52-week high.

The 0% convertible notes due 2027 were the most active tranche.

The notes added 9 points outright with stock up more than 10% in intraday activity.

The 0% notes were trading at 127.375 versus a stock price of $1,527 early in the session, according to a market source.

They were trading at 131 versus a stock price of $1,619 in the late afternoon.

There was $23 million in reported volume.

The 0.625% convertible notes due 2030, which priced on March 5, jumped 14 points outright.

They were trading at 124.75 versus a stock price of $1,546 early in the session and were changing hands at 132 versus a stock price of $1,648 in the late afternoon.

“I cannot believe they’re trading here already,” a source said.

There was $9 million in reported volume.

MicroStrategy’s stock traded to a low of $1,477.35 and a high of $1,657.06 before closing at $1,484.23, an increase of 4.11%.

MicroStrategy announced Monday that it had upped its Bitcoin investment with the purchase of 12,000 additional coins at an average price of $68,477 for about $822 million.

The greenshoe on MicroStrategy’s 0.625% convertible notes was recently exercised in full, lifting the full size of the issue to $800 million.

The purchase of Bitcoin was the intended use of proceeds from MicroStrategy’s convertible notes offering.

The Bitcoin frenzy also lifted Coinbase’s 0.5% convertible notes due 2026.

The notes added about 2.5 points outright with stock up as much as 5% in intraday activity although stock gave back all gains to close in the red.

Coinbase’s 0.5% notes were trading at 108.25 versus a stock price of $266.69 in the late afternoon, according to a market source.

There was $12 million in reported volume.

Coinbase’s stock traded to a low of $253.96 and a high of $271.65 before closing at $254.17, down 0.95%.

Mentioned in this article:

Coinbase Global, Inc. Nasdaq: COIN

Federal Realty Investment Trust NYSE: FRT

Global Payments Inc. NYSE: GPN

NextEra Energy Partners LP NYSE: NEP

© 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.