Morning Commentary: Convertible bond trading muted amid geopolitical issues; Priceline steady

By Stephanie N. Rotondo

Seattle, April 11 – It was “extremely slow” in the convertible bond market early Tuesday, a trader said.

The low liquidity – just $87 million in total bonds had traded as of mid-morning, the trader said – was due in part to it being Pesach, or Passover, which resulted in empty desks. Additionally, geopolitical concerns regarding the Middle East and the Korean Peninsula were troubling investors, which was putting pressure on equities.

But as far as convertibles went, “there’s nothing really moving a lot,” a trader said.

Priceline Group Inc.’s 0.9% convertible notes due 2021 took up the bulk of the morning’s trading, according to a market source. The paper was holding its ground around the 112 mark, though the underlying stock (Nasdaq: PCLN) was down over $14, trading at $1,761.90.

However, there was no fresh news out on the travel services provider to cause the movement in the convertibles or the equity.

One sellside source pointed out that the 0.9% convertibles were trading at a 31% premium and with a negative yield to maturity.

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