Luckin Coffee convertible notes in focus; MongoDB gains continue; Exact Sciences down

By Abigail W. Adams

Portland, Me., Jan. 13 – The convertibles market opened the new year on strong footing with decent issuance, heavy trading volume and investors ready and willing to put money to work.

While no deals were launched on Monday, the Jan. 13 week is expected to be an active one for the primary market with issuers getting deals done before the earnings season blackout begins.

Monday was another active session for the secondary space with accounts most likely raising funds and making room for the anticipated new issuance, sources said.

The new paper to hit the aftermarket last Friday continued to dominate trading activity.

Luckin Coffee Inc.’s 0.75% convertible notes due 2025 saw “massive” trading volume with the notes continuing to gain on an outright basis.

MongoDB Inc.’s newly priced 0.25% convertible notes due 2026 continued to gain on an outright and dollar-neutral basis in active trading.

While Luckin Coffee and MongoDB topped the volume charts, several biotech names saw renewed attention with J.P. Morgan’s health care conference kicking off in San Francisco.

Exact Sciences Corp.’s 0.375% convertible notes due 2027 were active with the notes dropping on an outright basis as stock sank following preliminary fourth-quarter results.

Luckin Coffee in focus

Luckin Coffee’s 0.75% convertible notes due 2025 continued to see high-volume activity on Monday.

The 0.75% notes were changing hands just shy of 105.5 early in the session, a market source said.

They were quoted at 107 bid in the late afternoon.

While the notes continued to gain on an outright basis, they were moving in line on a dollar-neutral basis, one source said.

Another source saw them up about 0.5 point dollar-neutral.

The notes were priced cheap and the borrow is set to improve on Tuesday, a source said.

Luckin’s ADS continued their upward momentum on Monday.

The ADS traded to a high of $47.66 and a low of $44.10 before closing the day at $45.90, an increase of 5.96%.

Luckin’s shares and convertible notes “have had a crazy move,” a market source said.

While there was some skepticism over the deal due to concern over the borrow, the notes skyrocketed in the secondary space.

They saw a 4-point dollar-neutral expansion on their market debut on Friday, a source said.

MongoDB gains continue

MongoDB’s newly priced 0.25% convertible notes due 2026 continued to gain in active trading.

The 0.25% notes traded just north of 104 early in the session and were up to 104.875 bid by the late afternoon.

The notes were continuing to build premium and were up another 0.125 to 0.375 point on a dollar-neutral basis, a source said.

MongoDB stock was on the rise on Monday.

Stock traded to a high of $155.68 and a low of $150.00 before closing the day at $152.91, an increase of 2.47%.

The notes expanded about 2 points dollar-neutral on their market debut on Friday.

Exact Sciences down

With J.P. Morgan’s health care conference kicking off in San Francisco, the biotech space is expected to be in focus throughout the week.

Several names from the sector were on the tape on Monday.

Exact Sciences’ 0.375% convertible notes due 2027 were active and trading down on an outright basis as stock sank following preliminary fourth-quarter results.

The 0.375% notes dropped 8 points outright to close Monday at 112.875.

The dollar-neutral move was based on the delta used, which varied among different holders, sources said.

Exact Sciences stock closed Monday at $90.16, a decrease of 13.67%.

The molecular diagnostics company reported fourth-quarter revenue of $294 million to $296 million with its flagship product Cologuard for colon cancer screening generating $229 million to $230 million.

Exact Sciences is slated to present at the health care conference on Wednesday.

Mentioned in this article:

Exact Sciences Corp. Nasdaq: EXAS

Luckin Coffee Inc. Nasdaq: LK

MongoDB Inc. Nasdaq: MDB

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