Morning Commentary: Convertibles trading subdued as week ends; Advanced Micro Devices in focus

By Stephanie N. Rotondo

Seattle, Oct. 14 – Trading in the convertible bond market was muted in early Friday trading.

However, a trader noted that Advanced Micro Devices Inc.’s 2.13% convertible notes due 2026 – a $700 million issue that priced Sept. 8 with a 33% conversion premium – were on the more active side.

The trader placed the issue at 109 versus a stock price of $6.98.

The equity was up as much as 7% by mid-morning, as it was announced that the semiconductor manufacturer was partnering with Alibaba Group’s cloud computing unit.

“The partnership between AMD and Alibaba Cloud will bring both of our customers more diversified, cloud-based graphic processing solutions,” said Simon Hu, president of Alibaba Cloud, at the Alibaba Computing Conference on Friday.

Also trading somewhat busily were Spirit Realty Capital Inc.’s 3.75% convertible notes due 2021, according to a trader.

The trader saw the convertibles at 111.35 against a share price of $12.70.

The equity, for its part, was slightly higher day over day, though there was no fresh news out on the real estate investment trust to act as a catalyst.

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