Morning Commentary: Pioneer Natural Resources convertible notes active on quiet morning

By Abigail W. Adams

Portland, Me., Sept. 26 – It was a slow start to the week in the convertibles secondary space with equity markets choppy following last week’s sell-off.

While equity indexes launched the day with gains, they quickly gave them back and were mixed shortly before 11 a.m. ET.

The Dow Jones industrial average was down 133 points, or 0.44%, the S&P 500 index was down 0.25%, the Nasdaq Composite index closed was up 0.27% and the Russell 2000 index was up 0.02%.

There was $45 million in reported volume about one hour into the session with few names seeing concentrated trading activity.

Pioneer Natural Resources Co.’s 0.25% convertible notes due 2025 (Baa1/BBB) were active as energy futures also pared some losses after giving back all gains on the year the previous week.

The 0.25% notes were changing hands at 209.5 versus a stock price of $207.51 early in the session, according to a market source.

There was $3 million in reported volume.

Pioneer’s stock wavered between gains and losses early in the session and was trading at $208.23, a decrease of 0.26%, shortly before 11 a.m. ET.

The 0.25% notes were among the few winners of 2022 as equity surged amid climbing oil prices.

The notes have come down significantly since their mid-June peak in the 250s.

The deep-in-the money notes move in lockstep with equity.

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