Morning Commentary: Micron Technology to call 3% convertibles; Western Digital active

By Abigail W. Adams

Portland, Me., Feb. 4 – The convertible secondary space was off to a slow start on Monday with news that Micron Technology Inc. would be calling its 3% convertible notes due 2043 sending a buzz through the market.

Micron announced prior to the market open that it would be pricing investment-grade senior notes with proceeds to be used to retire its 3% convertible notes.

The 3% notes currently have $1.025 billion outstanding, according to Trace data. While quiet early in Monday’s session, the notes last changed hands at 136.85 on an outright basis.

They have been callable at par since Nov. 20, 2018 subject to a 130% hurdle.

The notes are in the money with a conversion price of $29.16. Micron stock closed Friday at $39.60.

Meanwhile, there was about $62 million in trading volume on the tape a little over one hour into Monday’s session.

Western Digital Corp.’s 1.5% convertible notes due 2024 were again the major volume movers of the secondary space with more than $10 million on the tape.

The notes were changing hands around 86.625.

Western Digital stock was largely flat early in Monday’s session. Stock traded at $47.08, an increase of 0.17%, shortly before 11 a.m. ET.

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