Morning Commentary: Convertibles quiet on stock rally; Spirit Realty paper trades higher

By Stephanie N. Rotondo

Seattle, Nov. 7 – While the equity markets were taking off in active trading on Monday, the convertible bond market was not following suit.

“Nobody’s chasing anything in our market,” a trader said. “There are no outright buyers in anything.”

The stock markets were pushing up in the wake of an announcement that the FBI was not considering any criminal charges against Democratic presidential nominee Hillary Clinton in regards to e-mails from her private server.

On Oct. 28, the FBI said it was reopening the investigation, as new e-mails had surfaced. That sent shockwaves through the market, as it placed more uncertainty on the upcoming presidential election. With the news that the agency was not moving forward with charges, a little more certainty was getting priced in.

And while volume in the convertibles market continued to be subdued, there were signs that it was firming with its equity counterparts.

Spirit Realty Capital Inc., for one, was inching upward in early trading. A trader said the 2.875% convertible notes due 2019 were up at 104.625 bid, 104.8125 offered. That compared to 104.625 against a stock price of $11.42 prior to the market’s open.

For its part, the stock (NYSE: SRC) was up 6 cents at mid-morning at $11.48.

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