Morning Commentary: MercadoLibre convertibles in focus; Palo Alto, Alteryx active

By Abigail W. Adams

Portland, Me., Aug. 24 – The secondary convertibles space kicked off Friday with decent trading volume with more than $87 million on the tape early in the session.

MercadoLibre Inc.’s new 2% convertible notes due 2028 remained the volume leader with more than $17 million of bonds in play. The notes continued to make gains on an outright basis.

Then notes were seen up about 1.5 points to 2.5 points outright. The notes were trading between 103.5 and 104.5 early in the session, a market source said.

MercadoLibre stock shot up between 3% and 4% early Friday.

Palo Alto Networks Inc.’s 0.75% convertible notes due 2023 were also active with about $8 million of the bonds on the tape. The notes climbed about 1.5 points outright to trade at 103.375 with stock up 3.5% early in the session.

The level marks the highest outright price for the notes since they hit the market in mid-July.

Alteryx Inc.’s 0.5% convertible notes due 2023 were also active with about $5 million of the bonds on the tape. The notes were wrapped around 140 in early trading, a market source said.

While Alteryx’s 0.5% notes struggled during bookbuilding and had a rocky secondary market debut, the notes surged in late July and early August.

“The stock ripped to the upside,” a market source said. Alteryx stock jumped after the data and analytics company’s second-quarter earnings report. Alteryx stock was up about 1% to $55.50 early in Friday’s session.

Stock was $31.11 when the 0.5% convertible notes priced mid-May. The deal was reported to have struggled during bookbuilding with the $200 million offering pricing at a discounted reoffer price of 98.

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