Convertibles space firms; Illumina gains continue; Fortive better; Wayfair catches a bid

By Abigail W. Adams

Portland, Me., March 26 – The convertibles secondary space continued to firm on Thursday with equities again on the rise despite a historic surge in weekly U.S. jobless claims.

Optimism surrounding the $2 trillion stimulus bill, which is expected to soon pass the House of Representatives and to be signed into law, continued to buoy risk assets.

The Dow Jones industrial average closed the day up 6.38%, the S&P 500 index closed up 6.24% and the Nasdaq composite closed up 5.6%.

The secondary space followed suit with the overall convertibles market up 2 to 3 points dollar-neutral, a market source said.

“It’s a liftathon,” the source said.

Investment-grade paper continued to top the volume charts with several issues rebounding from their lows.

Illumina Inc.’s 0% convertible notes due 2023 continued to gain on both an outright and dollar-neutral basis in high-volume activity.

Fortive Corp.’s 0.875% convertible notes due 2022 also continued to improve.

Wayfair Inc.’s convertible notes were catching a bid with the embattled convertible notes posting gains on both an outright and dollar-neutral basis.

Akamai Technologies Inc.’s convertible notes also saw some action during Thursday’s session with the notes continuing to gain.

Illumina gains

Illumina’s 0% convertible notes due 2023 were in focus on Thursday with the notes continuing to gain on both an outright and dollar-neutral basis.

The 0% notes traded up 2.5 points outright to 95.5 in the mid-afternoon.

They expanded 2 to 3 points dollar-neutral, a market source said.

Illumina stock traded to a low of $250.43 and a high of $276.62 before closing the day at $274.42, an increase of 10.51%.

The notes were slowly recovering from the bloodletting the previous week, which pushed the notes down to 90 and saw them contract several points dollar-neutral.

The 0% notes were trading on a 104-handle the first week of March.

Fortive improves

Fortive’s 0.875% convertible notes due 2022 also continued to improve in high-volume activity on Thursday.

The 0.875% notes gained 1.5 points outright to trade up to 92.5 in the late afternoon, a market source said.

The yield on the notes was about 5.125%.

Fortive stock was also on the rise on Thursday. Stock closed Thursday at $51.67, an increase of 3.57%.

However, the investment-grade paper mostly trades outright, a source said.

The notes were continuing to trade off their lows after closing out last week at 88, the lowest level for the investment-grade paper since they priced in February 2019.

Wayfair catches a bid

Wayfair’s convertible notes were catching a bid on Thursday as the embattled home goods e-commerce company’s stock rebounded.

Wayfair’s 1.125% convertible notes due 2024 rose about 7 points outright to 72 Thursday afternoon.

The notes were trading in the low 50s on Tuesday.

Wayfair’s 0.375% convertible notes due 2022 rose 2.5 points to trade just shy of 80 Thursday afternoon.

While volume was light, the 0.375% notes rose almost 10 points to 77.5 during Wednesday’s session.

The notes were seen better by 3 to 4 points dollar-neutral, a market source said.

After surging 25% during Wednesday’s session, Wayfair stock continued its upward momentum on Thursday.

Stock traded to a low of $52.11 and a high of $61.29 before closing the day at $55.08, an increase of 7.31%.

While coronavirus induced volatility dragged Wayfair’s convertible notes into the 50s over the past two weeks, layoffs and disappointing earnings dragged the notes into the 80s before panicked selling hit the secondary space.

However, with retailers shutting doors to help stymie the spread of the coronavirus, investors are taking a renewed interest in the online retailer.

Akamai active

Akamai Technologies convertible notes were also active on Thursday with the notes continuing to gain.

Akamai’s 0.125% convertible notes due 2025 were changing hands at 109.5 versus an equity price of $88.58 early in the session, according to a market source.

They continued to gain as stock turned positive into the afternoon as traded as high as 112.125.

Akamai’s 0.375% convertible notes due 2027 traded up 1 point outright to 98.5.

Akamai’s stock traded to a low of $86.74 and a high of $94.86 before closing the day at $94.38, an increase of 5.63%.

Mentioned in this article:

Akamai Technologies Inc. Nasdaq: AKAM

Fortive Corp. NYSE: FTV

Illumina Inc. Nasdaq: ILMN

Wayfair Inc. NYSE: W

© 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.