Morning Commentary: Tesla convertible notes in focus; short-dated SolarCity bonds jump

By Abigail W. Adams

Portland, Me., July 3 – An otherwise uneventful day in the convertibles secondary space saw Tesla Inc. return to focus with the electric car manufacturer’s convertible bonds trading up alongside stock following a record quarter for car sales.

Tesla’s 2% convertible notes due 2024 jumped 4 points outright on the news. They traded up to 102.5 early in Wednesday’s session, according to Trace data.

The 2% notes have largely languished below par since shortly after pricing in early May.

Tesla’s 2.375% convertible notes due 2022 jumped 3 point outright to 102.

The notes have also languished below par since May when Tesla stock cracked.

While still well below its 52-week high, Tesla stock soared on Wednesday after the company reported a record number of car sales for the second quarter.

Stock traded as high as $241.57 early in the session and was changing hands around $238.56, an increase of 6.24%, shortly before 11 a.m. ET.

Tesla reported the delivery of 95,200 cars for the second quarter, beating analyst expectations for deliveries of 91,000 cars.

While volume was light, SolarCity Corp.’s soon-to-mature 1.625% convertible notes due Nov. 1, 2019 were also posting gains. The notes jumped 2 points outright to 98.25.

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