Morning Commentary: Tesla adds on swap with shares higher; Echo Global Logistics launches deal

By Rebecca Melvin

New York, April 27 – Tesla Motors Inc.’s convertible bonds gained on an outright basis and were better on swap early Monday with shares of the Palo Alto, Calif.-based electric car maker sharply higher following a positive note by Deutsche Bank.

The bank said that the company’s electricity storage products may boost results more than expected. It left unchanged its “buy” rating and $245.00 price target on the shares.

Tesla’s 1.25% convertible due 2021 were last seen at about 94, which was up nearly 3 points on the day on an outright basis.

On a hedged basis, the Tesla convertibles were up about 0.5 point “across the board,” a New York-based trader said.

Tesla’s 1.5% convertibles due 2018 were last seen at 193, and the Tesla 0.25% convertibles due 2019 were last seen at 92.5.

Tesla shares were up $18.57, or 8.5%, to $237.00.

In the primary market, Echo Global Logistics Inc. launched an offering of $150 million of five-year convertible senior notes ahead of the market open. The deal was seen pricing Wednesday.

The registered notes were talked to yield 2.75% to 3.25% with an initial conversion premium of 27.5% to 32.5%.

Otherwise the market was “pretty quiet,” with the lack of activity chalked up to the fact that it is a Monday and many market players were still gearing up after the weekend. This coming week will mark month end, and there was a broader swath of names in trade, but not much volume in any of them, according to Trace data.

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