Morning Commentary: iQIYI convertibles up again; RH improves

By Abigail W. Adams

Portland, Me., April 1 – The convertibles market launched the week on firm footing with manufacturing data from China bolstering stocks and Treasury yields on the rise after reaching their lowest point in recent history the previous week.

All eyes will be on the primary market to see what the week will bring for new deals before the earnings season blackout begins.

iQIYI Inc.’s recently priced 2% convertible notes due 2025 remained in focus with the notes continuing their upward momentum.

The 2% notes from the Beijing-based online entertainment service provider rose another 2 points outright.

They were changing hands north of 106 early in Monday’s session and were expanded another 0.25 to 0.5 point dollar-neutral, a market source said.

More than $20 million of the bonds were on the tape about one hour into Monday’s session.

iQIYI’s American Depositary Shares were $24.58, an increase of 2.74% shortly before 11 a.m. ET.

RH, formerly Restoration Hardware Holdings Inc., also firmed early Monday after a slashed outlook sent the company’s stock tumbling on Friday.

RH’s soon-to-mature 0% convertible notes due June 15 were again active and slightly improved early in Monday’s session.

The 0% notes were changing hands around 100.5. They were improved about 0.375 to 0.5 point dollar-neutral, a market source said.

More than $12 million of the bonds were on the tape early in the session.

RH stock was $103.21, an increase of 0.25%, shortly before 11 a.m. ET.

The 0% notes due June 15 are about to enter into the averaging period prior to their retirement.

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