Winnebago convertibles add outright; Western Digital gains; Evergy, Duke Energy active

By Abigail W. Adams

Portland, Me., Jan. 22 – The convertibles primary market was quiet on Monday, but with one deal on the calendar and equity indexes shooting to new heights, an active week of new issuance is anticipated.

Meanwhile, the secondary space saw a firm start to the week with equity indexes strong after the S&P 500 index closed the previous week at an all-time high.

The Dow Jones industrial average closed Monday up 138 points, or 0.36%, the S&P 500 index closed up 0.22%, the Nasdaq Composite index closed up 0.32% and the Russell 2000 index closed up 2%.

There was $90 million in reported convertibles trading volume about one hour into the session and $397 million on the tape about one hour before the market close.

Winnebago Industries Inc.’s new 4.5% convertible notes due 2030 remained active their second day in the secondary space with the notes adding to their strong outright gains on debut.

Investment-grade issues continued to dominate the tape with Evergy Inc.’s 4.5% convertible notes due 2027 (Baa2/BBB) and Duke Energy Corp.’s 4.125% convertible notes due 2026 (Baa2/BBB) seeing heavy volume on a relatively flat day for Treasuries.

Western Digital Corp.’s 3% convertible notes due 2028 were also active as stock hit a new 52-week high after Morgan Stanley analysts named the company as their top pick in the sector.

Winnebago Day 2

Winnebago’s 4.5% convertible notes due 2030 held onto their large expansion and continued to add to their outright gains in active trade their second day in the secondary space.

The 4.5% notes were up about 0.5 point outright with stock up a little under 1%.

The notes were trading just north of 102.875 versus a stock price of $67.56 in the late afternoon, according to a market source.

There was $14 million in reported volume.

Winnebago’s stock traded to a low of $67.48 and a high of $69.05 before closing at $68.57, up 1.58%.

The 4.5% notes were the last deal to clear the primary market with the offering playing to strong demand and jumping on its aftermarket debut.

The notes expanded 2 to 3 points dollar-neutral last Friday.

High-grade trades

Investment-grade convertible notes continued to drive volume in the secondary space although with little price movement.

Evergy’s 4.5% convertible notes due 2027 were slightly weaker outright on a weak day for its stock.

The notes were changing hands at 101.25 versus a stock price of $50.67 early in the session, according to a market source.

They were trading at 101 versus a stock price of $50.11 in the late afternoon.

There was $25 million in reported volume.

Evergy’s stock traded to a low of $49.69 and a high of $50.99 before closing at $49.86, down 1.15%.

Duke Energy’s 4.125% convertible notes due 2026 were flat outright as stock dipped into negative territory.

The notes were trading at 99.75 versus a stock price of $96 early in the session, a source said.

They remained wrapped around 99.75 in the late afternoon.

There was $14 million in reported volume.

Duke Energy’s stock traded to a low of $94.70 and a high of $96.29 before closing at $95.06, off 0.53%.

Western Digital’s day

Western Digital’s 3% convertible notes due 2028 made strong gains in active trade as stock hit a new 52-week high.

The 3% convertible notes were up 4.5 points outright with stock up a little more than 4%.

They were changing hands at 129.875 versus a stock price of $57.58 in the late afternoon, according to a market source.

There was $8 million in reported volume.

Western Digital’s stock traded to a low of $56.50 and set a new 52-week high of $58.73 before closing at $57, an increase of 4.07%.

Stock hit new heights after Morgan Stanley analysts named the company as their top pick in the semiconductor sector.

The shares have shot up more than 10% in the past week after positive earnings from industry peers lifted the sector.

Mentioned in this article:

Duke Energy Corp. NYSE: DUK

Evergy Inc. Nasdaq: EVRG

Western Digital Corp. Nasdaq: WDC

Winnebago Industries Inc. NYSE: WGO

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