Sea surges in active trade; Square, LendingTree add with shares; Golar maturity eyed

By Rebecca Melvin

Concord, N.H., Oct. 7 – In the absence of new paper, the convertibles secondary market was trading up in step with gains in equities on Thursday.

Stocks were up in an apparent relief rally due to favorable developments involving the U.S. debt ceiling. Republican lawmakers late Wednesday offered a short-term debt limit extension to help stave off the possibility of a government default for at least two months.

Meanwhile, the convertibles market’s last new deal priced last week with the upsized $1.1 billion of 0% five-year convertible notes of SoFi Technologies Inc. The newer SoFi bond was marked down 0.44 point to 105.45 on $16 million of reported volume on Thursday, according to a market source. Shares of SoFi closed down 22 cents, or 1.3%, to $16.40.

Overall, the convertibles secondary market saw “pretty good” volume on the equity upswing, with reported volume of $690 million.

Sea Ltd.’s convertibles rose in solid trade and were deemed to be the most active of the day. The Sea 0.25% convertibles were up 1.18 points to 102.25. The Sea American Depositary Shares rose $8.91, or 2.8%, to $324.25. The Singapore-based global consumer internet company priced $2.5 billion of the five-year convertibles with an initial conversion premium of 50% on Sept. 10.

Square Inc.’s 0.125% convertibles due 2025 and LendingTree Inc.’s 0.5% notes due 2025 were also seeing decent trading action on Thursday.

The Square convertibles traded last at 210.75, which was up 8.25 points against a closing share price of $249.16, up $10.04, or 4.2%.

The San Francisco-based financial services and payment company was upgraded to a buy by Jefferies., which also lifted its stock price target to $300 per share.

LendingTree, the Charlotte, N.C-based online lending marketplace, saw its 0.5% convertibles change hands at 84.875, which was up nearly a point against the common stock, which was up $4.89, or 3.7%, to $138.11.

Golar LNG Ltd.’s 2.75% senior notes, which mature on Feb. 15, were also active at 100.10, which was up 0.375 point on the day. About $11.5 million of those shares traded.

In the early going on Thursday, Novavax Inc.’s convertibles were getting attention as the underlying shares popped. The Novavax 3.75% convertibles due 2023 were seen changing hands at 145.375. Novavax’s shares were up $5.65, or 3.5%, at $167.50. The stock closed lower at $165.68, which was still positive on the day.

Novavax’s shares plunged in September as hopes for its Covid-19 vaccine were dashed amid an ongoing wait for regulatory approval.

Insmed Inc.’s $575 million of 0.75% convertibles due 2028 were seen trading on a move in the underlying shares. They were last at 109.75. Insmed’s shares were up 2.3% to $28.09 early Thursday. By the close, shares were still higher but only by 15 cents, or 0.6%.

The equities markets have seen some volatility in recent sessions amid a range of tail risks that have emerged, including the government’s debt ceiling impasse and concerns regarding China’s economy. But on Thursday, the Dow Jones industrial average jumped 337.95 points, or nearly 1%, to 34,754.94; the S&P 500 index gained 36.21 points, which was up 0.8%, to 4,399.76; and the Nasdaq Composite gained 152.10 points, or 1.1%, to 14,654.02. The indices are now solidly higher on the week as Thursday’s gains added to upticks on Tuesday and Wednesday to wipe out Monday’s losses.

Mentioned in this article:

Golar LNG Ltd. Nasdaq: GLNG

Insmed Inc. Nasdaq: INSM

LendingTree Inc. Nasdaq: TREE

Novavax Inc. Nasdaq: NVAX

Sea Ltd. NYSE: ADS: SEA

SoFi Technologies Inc. Nasdaq: SOFI

Square Inc. NYSE: SQ

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