Morning Commentary: Convertibles secondary quiet in early trade; Southern Co. improves

By Abigail W. Adams

Portland, Me., March 24 – It was a quiet start to the day in the convertibles secondary space amid continued volatility in financial markets.

Equities slumped and Treasuries remained strong amid continued concern for the banking sector with Deutsche Bank now in the crosshairs.

The Dow Jones industrial average was down 190 points, or 0.61%, the S&P 500 index was down 0.52%, the Nasdaq Composite index was down 0.53% and the Russell 2000 index was down 0.68% shortly before 11 a.m. ET.

Treasuries continued to gain with the two-year yield falling 14 basis points to 3.7% in early trade and high-yield credit spreads continued to widen.

Few were making moves in the convertibles secondary space with $46 million in reported volume about one hour into the session.

Southern Co.’s 3.875% convertible notes due 2025 (Baa2/BBB) continued to improve in heavy volume with buyers lifting the notes.

The notes were changing hands at 100.875 shortly before 11 a.m. ET.

There was $9 million in reported volume.

Southern Co.’s stock was trading at $67.22, an increase of 1.33%, shortly before 11 a.m. ET.

Silicon Laboratories Inc.’s 0.625% convertible notes due 2025 remained active after the company called the notes with a redemption date of June 30.

The 0.625% notes were seen at 146.5 versus a stock price of $169.28 early in the session.

There was $4 million in reported volume.

Silicon Laboratories’ stock was changing hands at $169.04, a decrease of 2.28%, shortly before 11 a.m. ET.

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