Convertibles trading volume light; Infinera dominates; Tesla, Perficient notes improve

By Abigail W. Adams

Portland, Me., Sept. 10 – Trading volume in the convertibles secondary space was light on Monday with several places at half-staff as many observe the Jewish New Year.

There was about $238 million on the tape by late afternoon with few notable price movements, sources said.

While quiet early in the session, Infinera Corp.’s 2.125% convertible notes due 2024 emerged as the volume leader in the afternoon.

The notes were up slightly on an outright basis and down slightly dollar-neutral with stock on the rise.

Perficient Inc.’s 2.375% convertible notes due 2023 climbed further above par during Monday’s session after a sloppy secondary market debut. However, the notes remained largely flat dollar-neutral.

Retrophin Inc.’s 2.5% convertible notes due 2025 were down slightly on an outright and dollar-neutral basis in light trading volume.

Tesla Inc.’s three tranches of convertible notes were bouncing back on Monday with stock on the rebound as Friday’s headlines fade from focus.

Ctrip.com Intl. Ltd.’s soon-to-mature 1.25% convertible notes due Oct. 15, 2018 were among the volume leaders of Monday’s session with the notes dropping on an outright basis to trade close to par.

Infinera dominates

While slow to trade early in Monday’s session, Infinera’s newly priced 2.125% convertible notes dominated trading activity their second day in the market.

The notes improved on an outright basis with stock gaining into the afternoon. However, the 2.125% notes were in slightly dollar-neutral, shaving off a sliver of the large gains seen on their Friday debut.

The notes were largely trading between 100.5 and 101 during Monday’s session, a market source said.

They were seen trading at 101 versus an equity price of $7.31.

About $15.5 million of the bonds were on the tape by the late afternoon. The notes were in slightly on a dollar-neutral basis with stock up in the afternoon, a market source said.

Infinera stock closed Monday at $7.42, an increase of 2.49%.

While in slightly on Monday, the notes expanded about 2 points dollar-neutral on their secondary market debut on Friday.

“They did pretty well,” a market source said.

The manufacturer of optical transmission equipment priced an upsized $350 million of the notes prior to the market open on Friday.

Perficient improves

Perficient’s 2.375% convertible notes due 2023 continued to improve on an outright basis on Monday with the notes climbing further above par.

The notes were seen at 100.75 bid, 101 offered Monday afternoon with stock on the rise.

They were largely unchanged dollar-neutral, a market source said. About $6 million of the bonds were on the tape by the late afternoon.

Perficient stock closed Monday at $30.75, an increase of 3.67%.

The 2.375% notes had a sloppy secondary market debut on Sept. 6, dipping into the 97 range with stock off almost 5%.

The notes improved on Friday to close the day around par. They have traded largely flat on a dollar-neutral, or hedged, basis since pricing, sources said.

Retrophin down slightly

Retrophin’s 2.5% convertible notes due 2025 were down slightly on an outright and dollar-neutral basis on Monday in light trading volume.

The notes dropped to a 102 handle and were in about 0.25 point dollar-neutral, a market source said.

However, less than $2 million of the bonds had traded by the late afternoon. Retrophin stock closed Monday at $28.87, a decrease of 0.76%.

While down slightly on Monday, the notes have performed well in the secondary space since their Sept. 6 debut.

The notes have expanded about 3 points dollar-neutral since pricing.

Tesla rebounds

After taking a hit on Friday, Tesla’s three tranches of convertible notes were bouncing back on Monday as the latest batch of headlines concerning the electric car manufacturer fade from focus.

Tesla’s 0.25% convertible notes due 2019 were up about 2 points outright to trade at par versus an equity price of $277.61, according to a market source. About $4 million of the bonds had traded by the late afternoon.

Tesla’s 1.25% convertible notes due 2021 were up about 3.25 points outright. They were seen trading at 98.5 versus an equity price of $280.00, a market source said.

About $7 million of the bonds were on the tape by the late afternoon.

Tesla’s 2.375% convertible notes were up about 3 points outright to trade at 104.625 versus a stock price of $280.00. About $3 million of the bonds had traded by late afternoon.

The notes were up 0.25 point to 0.5 point dollar-neutral, a market source said.

Tesla stock closed Monday at $285.67, an increase of 8.52%.

While the convertible notes pared some of their losses from Friday, they are still below their previous levels.

The 0.25% convertible notes were down 0.375 point, the 1.25% notes were down 1.5 points and the 2.375% convertible notes were down 1 point dollar-neutral on Friday.

Investor confidence was shaken on Friday after news stories broke about two high profile resignations and CEO Elon Musk smoking marijuana during a podcast interview.

Ctrip matures

Ctrip’s 1.25% convertible notes due Oct. 15, 2018 were volume leaders on Monday with the notes dropping as they enter into their final days.

The 1.25% convertible notes were down about 1 point outright to trade at 100.5. More than $12 million of the bonds were on the tape by the late afternoon.

The Shanghai-based travel service provider priced $800 million of the convertible notes in 2013.

The notes, which carry a large premium, have steadily traded down on an outright basis as they have approached their maturity date.

Ctrip’s 1.25% convertible notes due 2022 were also active on Monday.

The notes were seen trading at 97.8 versus an equity price of $37.19 in the late afternoon with about $7 million of the bonds on the tape.

Ctrip stock closed Monday at $36.85, a decrease of 1.89%.

Mentioned in this article:

Ctrip.com Intl. Ltd. Nasdaq: CTRP

Infinera Corp. Nasdaq: INFN

Perficient Inc. Nasdaq: PRFT

Retrophin Inc. Nasdaq: RTRX

Tesla Inc. Nasdaq: TSLA

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.