Duke Energy gains continue in heavy volume; Southern Co., Alliant, PPL improve

By Abigail W. Adams

Portland, Me., April 6 – The convertible primary and secondary markets were dominated by one name throughout the course of the holiday-shortened week – Duke Energy Corp.

Duke Energy’s $1.5 billion offering of 4.125% convertible notes due 2026 was the sole deal to clear the primary market over the course of the week.

However, the chunky offering lifted the April 3 week to the fourth heaviest week of the year for new issuance.

While the pace of new issuance is expected to be subdued as earnings season commences, an active pipeline is expected going forward with offerings in the works, sources said.

Meanwhile, Duke Energy’s 4.125% convertible notes continued to dominate activity in an otherwise quiet secondary space.

The notes were again adding to their gains on a relatively flat day for equities and Treasuries.

Equity indexes opened the day in the red but inched out gains by the close with the Dow Jones industrial average up 3 points, or 0.01%, the S&P 500 index up 0.36%, the Nasdaq Composite index up 0.76% and the Russell 2000 index up 0.05%.

Investment-grade issues remained the trade of the day with Southern Co.’s 3.875% convertible notes due 2025 (Baa2/BBB) also improved in heavy volume.

Alliant Energy Corp.’s 3.875% convertible notes due 2026 (BBB+) and PPL Corp.’s 2.875% exchangeable notes due 2028 (Baa1/BBB+) also continued their upward momentum after weakness earlier in the week on the heels of Duke’s offering.

Duke Energy adds

Duke Energy’s 4.125% convertible notes due 2026 continued to dominate activity in the secondary space with the notes increasing in strength.

The notes gained 0.25 to 0.375 point outright.

They were traded in a tight range around 102 throughout the session, according to a market source.

There was about $105 million in reported volume.

Duke Energy’s stock traded to a low of $98.40 and a high of $99.77 before closing the day at $99.74, an increase of 0.89%.

The notes made nominal gains on their aftermarket debut on Tuesday and have continued to climb since.

Investment grade trades

Investment-grade trades remained the play in the secondary space with the issues to price in 2023 continuing to improve after some weakness earlier in the week on the heels of Duke’s offering.

Southern Co.’s 3.875% convertible notes due 2025 added 0.5 point outright.

The notes were changing hands in the 102.5 to 102.625 context in the late afternoon.

There was about $60 million in reported volume.

Southern Co. stock traded to a low of $71.67 and a high of $72.55 before closing the day at $72.31, an increase of 1.13%.

Alliant’s 3.875% convertible notes due 2026 held a 103-handle with the notes closing the day at 103.875.

Alliant’s stock traded to a low of $54.52 and a high of $55.38 before closing the day at $55.05, an increase of 0.42%.

PPL’s 2.875% convertible notes due 2028 returned to a par handle with the notes closing the day at 100.625.

PPL’s stock traded to a low of $28.25 and a high of $28.62 before closing the day at $28.55, an increase of 0.58%.

Mentioned in this article:

Alliant Energy Corp. Nasdaq: LNT

Duke Energy Corp. NYSE: DUK

PPL Corp. NYSE: PPL

Southern Co. NYSE: SO

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