Morning Commentary: Uber Technologies convertible notes in focus early, add to gains

By Abigail W. Adams

Portland, Me., Nov. 22 – While activity in the convertibles secondary space dwindled ahead of the market closure for the Thanksgiving holiday in the United States on Thursday, one name remained active.

Uber Technologies Inc.’s new 0.875% convertible notes due 2028 continued to dominate activity in the secondary space with the notes adding to gains after a strong aftermarket debut.

Equity indexes were in the green early Wednesday with the Dow Jones industrial average up 131 points, or 0.37%, the S&P 500 index up 0.42%, the Nasdaq Composite index up 0.58% and the Russell 2000 index up 0.85% shortly before 11 a.m. ET.

There was $63 million in reported convertible bond trading volume about one hour into the session with Uber’s new notes accounting for one-third of the total activity in the space.

The notes added another 0.5 point outright with stock up about 1% early in the session.

The notes were trading at 102 versus a stock price of $55.22, according to a market source.

There was $18 million in reported volume.

Uber’s stock was changing hands at $55.69, an increase of 1.53%, in intraday trading.

Uber’s latest convertible notes were “very successful,” a source said.

The offering played to strong demand during book building and made strong gains on its aftermarket debut with the notes closing the previous session on a 101-handle with about a 1 point dollar-neutral expansion.

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