Western Digital, Red Hat convertibles improve; Iconix ups exchange; Workday active

By Abigail W. Adams

Portland, Me., Feb. 16 – Friday was quiet in the convertibles space as the markets enter a three-day weekend after a tumultuous few weeks. Trading volume remained light throughout the week as broader equity markets rebounded from the recent sell-off.

Western Digital Corp.’s 1.5% convertible notes due 2024 continued to be actively traded and gaining strength. The 1.5% notes were trading north of 102.5 throughout Friday’s session.

Red Hat Inc.’s 0.25% convertible notes due 2019 also continued to make gains on Friday, trading up to 194 as its stock also continued to climb.

Iconix Brand Group Inc.’s outstanding 1.5% convertible notes due 2018 continued to see trading activity with their due date quickly approaching on March 15.

The company announced on Friday that it had upped its exchange agreement with some holders of the 1.5% notes for new 5.75% notes due 2023 to $125 million from $110 million.

Workday Inc.’s 0.25% notes due 2022 were active on Friday and traded up to 107 after slowly climbing throughout the week.

Trading up

Western Digital’s 1.5% convertible notes due 2024 continued to be actively traded on Friday.

The 1.5% notes were trading north of 102.5 throughout Friday’s session. Western Digital stock was up slightly, closing Friday at $84.91, an increase of 0.44%.

The recently priced notes were one of the few new deals to maintain their strength as volatility hit the broader markets and other new deals fell apart.

The notes weakened on Feb. 9 and dipped to 99 in scattered trades. The notes have steadily made gains throughout the week.

Red Hat’s 0.25% convertible notes due 2019 continued to trade up on Friday after it reached new heights on Thursday. The 0.25% notes reached as high as 194 on Friday.

Red Hat stock closed Friday at $142.71, an increase of 1.88%. The equity-sensitive convertible notes traded up to 190 on Thursday as Red Hat stock broke its 52-week high.

Iconix ups deal

Iconix’s outstanding 1.5% convertible notes due March 15, 2018 were active on Friday after announcing it had upped its exchange agreement.

The notes solidified around 95 after trading to a high of 98 on Monday when the exchange agreement was announced.

The New York-based owner, licenser and marketer of consumer brands announced on Friday it had increased its exchange agreement with some holders of the 1.5% notes for new 5.75% notes due 2023 to $125 million from $110 million.

The exchange agreement alleviated concerns Iconix would default on the 1.5% notes, which sent the notes tumbling to the 70 to 80 range in November. “It looks like they’ll make good on the bonds,” a market source said.

Workday active

Workday’s 0.25% convertible notes due 2022 were active on Friday and solidified around 107 after beginning the week at 103. Workday stock closed Friday at $124.01, a decrease of 0.24%.

While down at the market close on Friday, Workday stock has been active and making gains throughout the week.

The stock was upgraded on Monday by Needham & Co. analysts due to belief the Pleasanton, Calif.-based financial management software vendor’s platform was gaining steam.

The upgrade was also due to the belief the company would begin to make acquisitions that would augment its growth.

Workday launched a $250 million fund last week to identify, invest, and partner with start-up and growth companies focused on emerging technologies. Technologies include artificial intelligence, augmented and virtual reality, and blockchain.

Mentioned in this article:

Iconix Brand Group Inc. Nasdaq: ICON

Red Hat Inc. NYSE: RHT

Western Digital Corp. Nasdaq: WDC

Workday Inc. Nasdaq: WDAY

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