Live Nation convertibles under pressure as DOJ readies antitrust suit; PG&E weakens

By Abigail W. Adams

Portland, Me., April 16 – The convertibles primary market remained dormant and the convertibles secondary space remained weak on Tuesday as Federal Reserve chair Jerome Powell signaled a higher-for-longer rate environment.

The slew of macro data from the previous week sparked a dramatic repricing in markets with a June rate cut now off the table and the number of rate cuts to expect in 2024 a question mark.

Powell confirmed in afternoon comments that the still strong inflationary data warranted holding the Federal Funds target rate at its current level.

Equity indexes were mixed as Treasury yields continued their climb following Powell’s remarks.

The Dow Jones industrial average closed Tuesday up 64 points, or 0.17%, the S&P 500 index closed down 0.21%, the Nasdaq Composite index closed down 0.12% and the Russell 2000 index closed down 0.26%.

There was $71 million in reported volume about one hour into the session and $593 million on the tape about one hour before the market close.

Outright sellers were beginning to make moves after a “deer in the headlights” response to the downturn in the market the past few sessions, a source said.

PG&E Corp.’s 4.25% secured convertible notes due 2027 were among the traded issues in the space with the notes weaker alongside the broader market.

Shockwave Medical Inc.’s 1% convertible notes due 2028 continued to see activity with the takeout trade moving the paper.

Live Nation Entertainment, Inc.’s convertible notes were under pressure with the notes falling outright and contracting dollar-neutral on headlines that the Department of Justice was preparing an antitrust suit against the entertainment company.

PG&E weakens

PG&E’s 4.25% secured convertible notes due 2027 were weaker in heavy volume on Tuesday with the notes coming in alongside the broader market.

The 4.25% convertible notes were off about 0.5 point outright.

They were trading at 98.625 versus a stock price of $16 in the late afternoon, according to a market source.

There was $15 million in reported volume.

PG&E’s stock traded to a low of $15.96 and a high of $16.26 before closing at $16.03, down 1.6%.

Shockwave active

Shockwave Medical’s 1% convertible notes due 2028 remained active on Tuesday with the takeout trade continuing to move the paper, a source said.

The 1% notes were largely unchanged in the activity and were changing hands around 126.25 in the late afternoon, a source said.

There was $11 million in reported volume.

Shockwave Medical’s stock traded to a low of $326.45 and a high of $328.05 before closing at $327.50, an increase of 0.12%.

The notes have been a mainstay on Trace since Johnson & Johnson announced in early April it would acquire Shockwave for $335 per share in a deal with an enterprise value of $13.1 billion.

The deal is expected to close mid-year with the convertible notes to be taken out in the acquisition.

Live Nation pressured

Live Nation’s convertible notes were under pressure on Tuesday as stock dived following news the Department of Justice was readying an antitrust suit against the company.

Live Nation’s 3.125% convertible notes due 2029 were off 5 points outright with stock down more than 6% in early trade.

The notes were trading at 110.625 versus a stock price of $93 early in the session.

They were trading at 110.5 in the late afternoon.

The notes contracted about 0.5 point on hedge on the move down, a source said.

There was $9 million in reported volume.

Live Nation’s 2% convertible notes due 2025 were off 3.5 points outright to trade at 104 early in the session.

They were trading at 103.875 versus a stock price of $92 in the late afternoon.

The notes came in about 0.5 dollar-neutral, a source said.

There was $6 million in reported volume.

Live Nation’s stock traded to a low of $90.61 and a high of $94.28 before closing at $92.21, down 7.58%.

The Department of Justice has been probing Live Nation’s business practices since 2022 with the Wall Street Journal reporting post-close Monday that the agency was preparing to file an antitrust suit as early as May.

Mentioned in this article:

Live Nation Entertainment, Inc. NYSE: LYV

PG&E Corp. NYSE: PCG

Shockwave Medical Inc. Nasdaq: SWAV

© 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.