Morning Commentary: Western Digital convertibles eyed; Exact Sciences down outright

By Abigail W. Adams

Portland, Me., July 29 – It was a typical summer Monday in the convertibles secondary space with a slow start to trading activity.

There was about $53 million on the tape a little over one hour into the session with one name accounting for the majority of activity.

Western Digital Corp.’s 1.5% convertible notes due 2024 continued to see high trading volume by dollar amount on Monday.

The 1.5% notes were changing hands around 93.625, according to a market source. While there were only three trades on the tape, the notes saw $11 million in reported volume, accounting for the majority of reported volume on the tape early Monday.

Western Digital stock was $55.39, a decrease of 1.97%, shortly before 11 a.m. ET.

However, the 1.5% notes mostly trade for the yield, sources said.

Meanwhile, Exact Sciences Corp.’s 0.375% convertible notes due 2027 were trading down alongside stock early in Monday’s session.

The 0.375% notes shaved off more than 10 points outright as stock tanked following news that it would acquire Genomic Health.

The 0.375% notes traded down to 115.375 early in Monday’s session.

Stock traded as low as $101.40 early Monday but pared its losses and was changing hands at $104.145, a decrease of 11.68%, shortly before 11 a.m. ET.

Exact Sciences announced that it would purchase Genomic Health for $2.8 billion in a cash and stock transaction prior to the market open on Monday.

Genomic Health stockholders will receive $27.50 in cash and $44.50 in Exact Sciences stock under the terms of the deal, CNBC reported.

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