Morning Commentary: Convertibles secondary trading volume light; Western Digital active

By Abigail W. Adams

Portland, Me., Nov. 26 – The convertibles secondary space opened Monday with light trading volume.

There was about $60 million on the tape a little over one hour into the session with Western Digital Corp.’s 1.5% convertible notes due 2024 composing a large portion of the trading volume, a market source said.

The 1.5% convertible notes changed hands just north of 83.75 with more than $10 million of the bonds in play early in the session, a market source said. The notes were largely flat on an outright basis.

Western Digital stock traded up to $48.50 at the market’s open but quickly came in and was also largely flat at $47.37 shortly before 11 a.m. ET.

Some soon to mature convertible notes were also active in the secondary space.

Akamai Technologies Inc.’s 0% convertible notes due Feb. 15, 2019 were changing hands at 99.25 with more than $4 million on the tape.

The trades were most likely cash alternative trades, a market source said.

Altaba Inc.’s 0% convertible notes due Dec. 1, 2018 also saw some trades on the tape. The notes were continuing to trade at parity at 115.41, a market source said.

Altaba stock was up to $64.31, an increase of 3.06% early in the session.

About $2 million of the bonds had changed hands.

Equities rebounded on Monday with the Dow Jones industrial average up 346 points early in the session. If markets remain strong, sources expect to see some new deal activity this week.

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