Morning Commentary: Duke Energy convertible notes active on quiet start to trading

By Abigail W. Adams

Portland, Me., July 3 – The convertibles secondary space was quiet early Monday with few making moves ahead of the early closure ahead of the July 4 holiday in the United States.

Equity markets were either side of unchanged early in the session with the Dow Jones industrial average down 16 points, or 0.04%, the S&P 500 index down 0.03%, the Nasdaq Composite index down 0.08% and the Russell 2000 index up 0.29% shortly before 11 a.m. ET.

Investment-grade convertible notes remained the driving force of trading activity on an otherwise anemic day.

Duke Energy Corp.’s 4.125% convertible notes due 2026 (Baa2/BBB) were again one of the most actively traded issues in the secondary space.

The notes improved outright alongside stock although they continued to trade near their all-time lows.

The 4.125% notes were trading at 97.875 early in the session, according to a market source.

There was $7.5 million in reported volume.

Duke’s stock was changing hands at $90.48, an increase of 0.82%, shortly before 11 a.m. ET.

The notes fell to a 97-handle the previous week, their lowest level since pricing at par in early April.

The notes took a hit, alongside other investment-grade convertible notes, as Treasury yields soared the previous week in response to strong macro data.

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