Evergy convertibles dominate quiet session; Expedia improves; Snap gains on upgrade

By Abigail W. Adams

Portland, Me., Dec. 11 – The convertibles primary market was dormant on Monday after the high-volume issuance of the previous week.

There may be some scattered activity in the days ahead, particularly if the market sees another Fed induced rally.

However, sources expect the coming days will be the last opportunity to get deals done as accounts start to close the books on 2023.

Meanwhile, it was a quiet session in the convertibles secondary space with markets sideways ahead of the release of the latest Consumer Price Index report on Tuesday and the last Federal Open Market Committee meeting of 2023.

Equity indexes wavered early in the session but notched nominal gains by the close with Treasuries largely flat.

The Dow Jones industrial average closed Monday up 157 points, or 0.43%, the S&P 500 index closed up 0.39%, the Nasdaq Composite index closed up 0.20% and the Russell 2000 index closed up 0.15%.

There was $46 million in reported convertibles trading about one hour into the session and $404 million on the tape about one hour before the market close.

While activity surrounding the flurry of issuance from the previous week largely tempered, Evergy Inc.’s recently priced 4.5% convertible notes due 2027 (BBB) saw heavy volume.

While the convertible notes dominated the tape, they saw little movement in price.

Expedia Inc.’s 0% convertibles due 2026 (Baa3/BBB/BBB-) improved in active trade with the notes set to be added to the Refinitiv Convertible Indexes on Thursday.

Snap Inc.’s 0.75% convertible notes due 2026 were also on the rise on a strong day which hit a new 52-week high on the heels of an analyst upgrade.

Evergy active

Evergy’s recently priced 4.5% convertible notes due 2027 dominated the tape on Monday although with little movement in price.

The 4.5% convertible notes remained wrapped around 101.

The notes were trading just north of 101 versus a stock price of $51.73 in the late afternoon, according to a market source.

There was $52 million in reported volume.

Evergy’s stock traded to a low of $50.95 and a high of $51.93 before closing at $51.78, up 0.43%.

The latest paper to come from an investment-grade utility company did not see spectacular gains in the aftermarket with the short-duration, low vol. paper having limited upside potential.

However, the notes’ performance has been solid with the notes notching both outright and dollar-neutral gains.

Expedia improves

Expedia’s 0% convertibles due 2026 improved in active trade with the notes set to be added to the Refinitiv Convertible Indices at the monthly rebalancing on Thursday.

The 0% notes added about 0.5 point outright.

They were trading at 93 in the late afternoon.

There was $15 million in reported volume.

Expedia’s stock traded to a low of $145.88 and a high of $149.94 before closing at $148.34, up 1.95%.

Snap gains

Snap’s 0.75% convertible notes due 2026 were on the rise as stock hit a new 52-week high following an analyst upgrade.

The 0.75% notes gained 2 points outright with stock up more than 4%.

The notes were trading at 103.125 versus a stock price of $15.91 in the late afternoon, according to a market source.

There was $8 million in reported volume.

Snap’s stock traded to a low of $15.52 and a high of $15.95 before closing at $15.75, an increase of 4.37%.

Snap’s stock saw a strong session after a Wells Fargo analyst upped to stock to “Overweight” from “Equal Weight” and raised the price target to $22 from $8.

Mentioned in this article:

Evergy Inc. Nasdaq: EVRG

Expedia Inc. Nasdaq: EXPE

Snap Inc. NYSE: SNAP

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