Morning Commentary: Convertibles secondary trading quiet but firm; Insulet notes jump

By Abigail W. Adams

Portland, Me., Aug. 30 – The convertibles secondary space saw another quiet yet firm start to the session on Wednesday as markets cheered on the latest macro data.

Equity indexes added to their strong gains from the previous session and Treasury yields continued to come in on the heels of the latest GDP print and ADP employment report, which reflected a slowdown in the economy and labor market.

While indexes were well off their early morning highs, they remained in positive territory with the Dow Jones industrial average up 7 points, or 0.02%, the S&P 500 index up 0.22%, the Nasdaq Composite index up 0.34% and the Russell 2000 index up 0.26% shortly before 11 a.m. ET.

There was $36 million in reported convertibles trading volume about one hour into the session with several names bid up.

While the broader market was strong, topical news pushed Insulet Corp.’s 0.375% convertible notes due 2026 into the spotlight with the notes making strong gains alongside stock.

The 0.375% notes rose 4 points outright with stock up more than 7%.

The notes were changing hands at $108 versus a stock price of $200.82 early in the session, according to a market source.

They were moving in line to slightly improved dollar-neutral.

The notes were the most actively traded issue early in the session with $6.5 million in reported volume.

Insulet’s stock was seen at $202.94, an increase of 7.11%, shortly before 11 a.m. ET.

Insulet has been active in recent weeks as analysts spar over their recommendations for the company.

The company’s stock saw a near simultaneous analyst upgrade and downgrade the previous week, which sparked volatility in the company’s stock.

Stock shot higher on Wednesday following the company’s announcement that it was releasing its automated insulin delivery system in Germany and reports of insider buying of the company’s stock.

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