Convertibles of tech sector in focus as equities rebound; China-based companies active

By Abigail W. Adams

Portland, Me., May 14 – There was a healthy amount of convertibles trading volume on Tuesday as equities rebounded from a brutal start to the week.

About $78 million of convertible bonds were on the tape about one hour into Tuesday’s session, and there was $310 million in reported volume by the mid-afternoon.

However, few names saw concentrated trading activity with no name logging more than $10 million in reported volume as the market headed into its final hour, a source said.

Names in the tech sector led trading volume as their equities rebounded amid firming markets.

NXP Semiconductors NV’s 1% convertible notes due Dec. 1, 2019 were active and posting gains alongside stock.

Microchip Technology Inc.’s 1.625% convertible notes due 2025 and Square Inc.’s 0.5% convertible notes due 2023 were also among the volume leaders.

The convertible notes of several China-based corporations were better bid on Tuesday, a source said.

While activity petered out into the afternoon, iQIYI Inc.’s 2% convertible notes due 2025, Huazhu Hotels Group Ltd.’s 0.375% convertible notes due 2022 and Ctrip.com International Ltd.’s 1.99% convertible notes due 2025 saw some activity early in the session.

Tech sector in focus

While few names saw concentrated trading activity on Tuesday, the tech sector led the charge on the tape with several names active as their equities rebounded from a brutal session on Monday.

NXP Semiconductors’ 1% convertible notes due Dec. 1, 2019 were gaining alongside stock. The 1% notes rose to 106.25 in the mid-afternoon, a market source said.

More than $8 million of the bonds were on the tape.

NXP Semiconductors’ stock closed Tuesday at $98.17, an increase of 5.42%.

Microchip Technology’s 1.625% convertible notes due 2025 also saw a healthy round of trading activity with the notes also on the rise alongside stock.

The 1.625% convertible notes rose about 1 point outright to 167.5.

While less active, the 1.625% convertible notes due 2027 were also up slightly. The notes were changing hands just south of 113.

Microchip stock traded as high as $85.00 before closing the day at $84.66, an increase of 1.26%.

Square’s 0.5% convertible notes due 2023 also gained about 1 point outright. The 0.5% convertible notes were changing hands at 111.875 on Tuesday.

The notes saw about $7 million in reported volume.

Square stock traded as high as $65.24 before closing the day at $64.11, an increase of 2.76%.

China-based issuers eyed

The convertible notes of several China-based companies were better bid on Tuesday, according to a market source.

While active early in the session, trading activity surrounding the notes largely petered out into the afternoon.

iQIYI’s 2% convertible notes due 2025 were making slight gains on an outright basis although stock was largely flat.

The Beijing-based media streaming company’s 2% notes rose about 0.5 point outright to change hands at 96.5.

About $5 million of the bonds were on the tape by the late afternoon.

Its American Depositary Shares closed Tuesday at $20.32, an increase of 1.55%.

iQIYI priced a $1.2 billion issue of the 2% notes in late March.

The notes traded as high as 107 out of the gate.

However, they have been on a downward spiral alongside stock throughout May.

Huazhu Hotels’ 0.375% convertible notes due 2022 were trading around 106.125 early in Tuesday’s session and stood poised to close the day north of 107.25, sources said.

About $5 million of the bonds were on the tape by the late afternoon.

The Shanghai-based hotel management company’s American Depositary Shares closed Tuesday at $35.98, an increase of 1.38%.

Ctrip.com’s 1.99% convertible notes due 2025 were changing hands around 106.375 on Tuesday.

The notes also saw about $3 million in reported volume.

Ctrip.com’s American Depositary Shares closed Tuesday at $38.85, an increase of 2.05%.

The Shanghai-based travel agency was rumored to be considering pricing a new convertible notes offering of up to $800 million in April.

However, the deal has yet to surface.

Mentioned in this article:

Ctrip.com International Ltd. Nasdaq: CTRP

Huazhu Hotels Group Ltd. Nasdaq: HTHT

iQIYI Inc. Nasdaq: IQ

Microchip Technology Inc. Nasdaq: MCHP

NXP Semiconductors NV Nasdaq: NXPI

Square Inc. NYSE: SQ

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