Spirit AeroSystems exchangeables gain; Rivian convertibles rally; Spirit Airlines higher

By Cristal Cody

Tupelo, Miss., Nov. 13 – Market action started off slow with only around $57 billion of reported secondary volume in the convertibles space an hour into the session on Monday and remained light throughout the session.

“It’s a sleepy Monday,” a market source said. “We haven’t even done $300 million.”

Secondary volume only totaled around $289.55 million headed into the close.

No rumblings were heard in the new issue space over the session, either.

“Nothing going on in the primary,” another source said.

Markets opened mostly softer on Monday following the weekend Veterans Day holiday and stayed mixed by the close.

The Dow Jones industrial average finished up 0.16% and the Russell 2000 closed 0.08% higher. The S&P 500 index declined 0.08% on the day, while the Nasdaq Composite index closed off 0.22%.

Spirit AeroSystems, Inc.’s new 3.25% exchangeable senior notes due 2028 that priced last week held steady over the day after climbing nearly 1 point early in the session.

Rivian Automotive Inc.’s paper climbed over 2 points as one of the day’s gainers, a source said.

The recently priced 3.625% convertible notes due 2030 rose over 2.25 points in early activity and were closing in on trading nearly 3 points better going out.

Rivian’s 4.625% convertible notes due 2029 also traded over 2 points better.

Secondary action totaled more than $12 million in the bonds.

Spirit Airlines Inc.’s 1% convertible notes due 2026 climbed 4 points on Monday but remained soft after plunging in the prior week.

Spirit AeroSystems up

Spirit AeroSystems’ 3.25% convertible notes due 2028 held steady over the day after climbing 0.89 point to trade at 107.95 versus an equity price of $24.47 about an hour after the market opened on Monday, a source said.

Trading totaled $5.4 million in the issue as the session wound down.

Spirit AeroSystems sold $200 million of the notes on Wednesday at par with a 32.5% exchange premium in its first tap of the convertibles market.

The company also brought a follow-on stock offering and was in the junk primary market on Thursday with $1.2 billion of 9.75% seven-year senior secured second-lien notes (B3/B-) as part of a series of capital raises.

Spirit AeroSystems’ common stock ended 1.94% better on Monday at $24.72. Shares were in a range of $24.32 to $25.27 over the session.

Rivian jumps

Rivian’s 3.625% green convertible notes due 2030 moved even higher over the session on Monday after climbing more than 2.25 points about an hour after the market opened, a source said.

The notes headed out more than 2.75 points better at a print of 93.07 versus an equity price of $16.09 on $6.5 million of trading.

Over the morning, the bonds were quoted at 92.55 versus a stock price of $15.71 on $3.5 million of activity.

The bonds took back some of last week’s post-earnings losses when the paper traded with a 90 handle.

Rivian sold the notes on Oct. 5 at par.

Rivian’s 4.625% convertible notes due 2029 also traded over 2 points better at 107 versus a stock price of $16.32 on $5.65 million of secondary action on Monday.

Rivian’s common stock closed 5.13% better on Monday at $16.19. Shares traded as low as $15.28 and as high as $16.38 over the session.

Spirit Airlines improves

Spirit Airlines’ 1% convertible notes due 2026 traded 4 points better on Monday at 44 and a 37.37% yield versus an equity price of $8.87 but remained weak, a source said.

Trading totaled over $3 million.

The notes traded with a 55 handle in the same session a week ago and traded in the low 70s at the end of October.

Spirit Airlines’ common shares finished up 1.48% to $8.91 on Monday. The stock traded in a range of $8.68 to $9.46 over the day.

Mentioned in this article:

Rivian Automotive Inc. Nasdaq: RIVN

Spirit AeroSystems Inc. NYSE: SPR

Spirit Airlines Inc. NYSE: SAVE

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