Morning Commentary: Convertibles start week on quiet note; recent issues dominate focus

By Rebecca Melvin

New York, Aug. 19 – The convertibles market was seeing calm early Monday as stock markets continued to rebound from a swoon last week, which had touched off a good deal of activity in the convertibles secondary space, a New York-based trader said.

The broader market was up with technology and bank names rallying early Monday, lifting the tech-heavy Nasdaq Composite up nearly 1.5%. Last week, investor reaction to rising trade tensions caused stocks and bond yields to fall.

Convertibles deals that priced last week, including Wayfair Inc.’s $825 million issue of 1% convertible notes due 2026 and Workiva Inc.’s $300 million of 1.125% convertible seven-year notes, were in focus, the trader said.

Snap Inc., which priced $1.27 billion of 0.75% seven-year notes earlier in the month, as well as BlackLine Inc.’s $435 million 0.125% notes due 2024, which also priced at that time, were also seeing mild action. BlackLine shares were up nearly 2% on the day, while Snap shares were last up 0.5%.

“Mandatory and preferreds, there is nothing on that front over 10,000 shares. Volumes are below normal” to start the week, the trader said.

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