Western Digital convertibles active; Luminar gains; Confluent, Norwegian Cruise improve

By Abigail W. Adams

Portland, Me., Dec. 22 – The convertibles secondary space was relatively active on Wednesday as equity markets extended their rally and market players adjusted their portfolios heading into the final days of the year.

The Dow Jones industrial average closed the day up 261 points, or 0.74%, the S&P 500 index closed up 1.02%, the Nasdaq Composite closed up 1.18% and the Russell 2000 index closed up 0.7%.

There was $73 million in reported convertible bond trading volume about one hour into the session and $471 million on the tape about one hour before the market close.

Western Digital Corp.’s 1.5% convertible notes due 2024 were active with the trading activity the result of end-of-year clean-up.

Luminar Technologies Inc.’s recently priced 1.25% convertible notes due 2026 extended their rally with the notes continuing to gain alongside stock.

Confluent Inc.’s recently priced 0% convertible notes due 2027 and NCL Corp. Ltd.’s 1.125% exchangeable notes due 2027 also improved on an outright basis in active trading.

Western Digital active

Western Digital’s 1.5% convertible notes due 2024 were among the top traded names of Wednesday’s session although with little movement in price.

The 1.5% convertible notes were changing hands around 100.375 with a yield of 1.318% early in the session.

They traded at 100.125 with a yield of 1.439% in the late afternoon.

There was $20.5 million in reported volume.

Western Digital’s stock was on the rise on Wednesday, closing the day at $59.79, an increase of 1.3%.

However, the high-premium convertible notes trade for their yield, a source said.

The activity in the name was a cash alternative trade with holders adjusting their portfolio, a source said.

Luminar gains continue

Luminar’s 1.25% convertible notes due 2026 extended their gains on Wednesday on a strong day for the company’s stock.

The 1.25% convertible notes rose about 2.25 points outright with stock up about 4%.

The notes were changing hands at 104.875 versus a stock price of $16.52 in the late afternoon.

There was $11 million in reported volume.

Luminar’s stock traded to a high of $16.96 and a low of $16.24 before closing the day at $16.70, an increase of 4.05%.

The notes have made large gains over the past few sessions after a rough aftermarket debut on Dec. 15 which saw the notes trade as low as 95.

However, the 1.25% notes have rallied alongside stock.

Proceeds from the convertible notes offering were to be used to repurchase up to $275 million in common stock.

Improved

Several convertibles issues were improved alongside their equities on Wednesday.

Confluent’s 0% convertible notes due 2027 gained 1 point with stock up about 1% in active trading.

The 0% convertible notes were changing hands at 102.5 versus a stock price of $69.40 in the late afternoon, according to a market source.

There was $15 million in reported volume.

Confluent’s stock traded to a high of $71.63 and a low of $67.99 before closing the day at $69.50, an increase of 0.8%.

In one of the final deals of the year, Confluent priced a $1.1 billion issue of the 0% convertible notes at par on Dec. 8.

While the notes fell below par amid the pullback in equities last week, they topped par and traded as high as 101.5 in Tuesday’s rally.

NCL’s 1.125% exchangeable notes due 2027 were also improved alongside Norwegian Cruise Line’s equity as the reopening trade returns to favor.

The 1.125% notes rose almost 2 points with stock up almost 2%.

The notes were changing hands at 98.25 versus a stock price of $22.77 in the late afternoon.

There was $12 million in reported volume.

Norwegian Cruise Line’s stock traded to a low of $21.65 and a high of $22.88 before closing the day at $22.62, an increase of 1.94%.

Mentioned in this article:

Confluent Inc. Nasdaq: CFLT

Luminar Technologies Inc. Nasdaq: LAZR

Norwegian Cruise Line Holdings Ltd. NYSE: NCLH

Western Digital Corp. Nasdaq: WDC

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