Morning Commentary: Zillow convertible notes active on quiet morning

By Abigail W. Adams

Portland, Me., April 18 – It was another quiet start to the day in the convertibles secondary space on Thursday as equity markets rebounded from the heaviness of the past week and a half.

Equity indexes were posting solid gains early in the session as the fears sparked by a higher-for-longer rate environment subsided.

The Dow Jones industrial average was up 279 points, or 0.74%, the S&P 500 index was up 0.53%, the Nasdaq Composite index was up 0.46% and the Russell 2000 index was up 0.77% shortly before 11 a.m. ET.

There was $48 million in reported convertible bond trading volume early in the session with few names seeing concentrated activity.

However, Zillow Group Inc.’s 1.375% convertible notes due 2026 were active with the notes weaker in early trade.

The 1.375% notes were off about 1 point outright with stock largely unchanged.

The notes were changing hands at 114.625 versus a stock price of $42.49 early in the session.

There was $5 million in reported volume.

Zillow’s stock was trading at $42.51, a decrease of 0.07%, shortly before 11 a.m. ET.

Zillow has been under pressure for the past month with a revamp of real estate commission fees and dragging home sales pulling down the company’s stock and convertible notes.

Home sales figures released on Thursday, which marked the largest decline in previously owned homes in more than one year, may have sparked the activity in the name, a source said.

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