Morning Commentary: Convertibles space quiet with ‘no real money’; Rivian notes drop

By Cristal Cody

Tupelo, Miss., April 12 – The convertibles space got off to a sleepy start with trading light and stocks down across the board early Friday.

Equity indices all were moving significantly lower over an hour into the session with the S&P 500 index down 1.01%, the Dow Jones industrial average off 0.92%, the Nasdaq 1.26% weaker and the Russell 2000 cut by 1.08%.

Treasury yields were coming down from Wednesday’s climb. The benchmark 10-year Treasury note yield dropped 9 basis points over the morning to 4.48%.

Overall secondary volume in the convertibles space was under $70 million more than an hour into trading.

“It has been extremely quiet,” a source said. “There’s been one or two buybacks and exchange, but no real money being raised in the market in the last week or two.”

Rivian Automotive Inc.’s convertible notes were leading secondary action as the session got underway with the paper down around 1 point to 2 points.

Rivian’s stock shed over 4% in early trading to hit a new 52-week low after diving on Thursday on reports that Ford Motor Co. lowered prices on its electric trucks.

Rivian declines

Rivian’s 4.625% convertible notes due 2029 dropped more than 1 point early Friday, while the company’s stock traded over 4% lower, a source said.

The notes were quoted at 70.25 with the equity at $9.34.

Trading was light at $6 million, though the issue was leading the tape.

Rivian’s 3.625% convertible notes due 2030 traded over 2 points lower on Friday at a print of 61.40 versus a stock price $9.27. Volume was pegged at a little more than $2 million.

Rivian’s stock declined over 4% in early trading to a new 52-week low of $9.14 after sinking on Thursday to $9.57 from Wednesday’s close of $10.27.

Shares were traded at $9.14 to $9.51 over the morning.

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