NextEra Energy improves; Global Payments active; LivePerson crumbles; Shift4 volatile

By Abigail W. Adams

Portland, Me., Feb. 29 – The convertibles primary market appeared closed after another high-volume week for new issuance with $1.95 billion pricing in three deals.

The active pace of issuance is expected to continue in the coming week with demand strong, equities supportive and pricing terms attractive.

The influx of new paper sparked heavy trading activity in the aftermarket on Wednesday, which was the heaviest volume session in more than one year, a source said.

However, activity surrounding recent issues settled on Thursday with trading volumes tempering as markets digested the latest U.S. Consumer Price Expenditure report, which came in largely as expected.

While value stocks underperformed with the Dow Jones industrial average wavering between gains and losses, all notched positive gains by the close.

The Dow closed Thursday up 47 points, or 0.12%, the S&P 500 index closed up 0.52%, the Nasdaq Composite index closed up 0.90% and the Russell 2000 index closed up 0.71%.

There was $112 million in reported convertibles trading volume about one hour into the session and $738 million on the tape in the late afternoon.

NextEra Energy Capital Holdings Inc.’s 3% exchangeable notes due 2027 (Baa1/BBB+) continued to see heavy volume with the notes improved after falling flat on their trading debut.

Global Payments Inc.’s 1.5% convertible notes due 2031 (Baa3/BBB-) were also a top trader on Thursday although with little movement in price.

Earnings also continued to spark large price movements with LivePerson Inc.’s 0% convertible notes due 2026 falling further into distressed territory after a large earnings miss.

Shift4 Payments Inc.’s 0% convertible notes due 2025 were volatile on an outright basis alongside stock as the market assessed reports about competing takeover bids for the company.

NextEra improves

NextEra’s 3% convertible notes due 2027 improved in heavy volume after a largely flat trading debut.

The 3% convertible notes climbed about 0.5 point outright with stock notching nominal gains.

The notes were changing hands just shy of 100.5 versus a stock price of $55.50 early in the session, according to a market source.

The convertibles were trading at 100.625 versus a stock price of $55.40 in the late afternoon.

The notes improved slightly on hedge, a source said.

There was $94 million in reported volume.

NextEra’s stock traded to a low of $54.96 and a high of $55.86 before closing the day at $55.19, an increase of 0.27%.

While the other deals to hit the aftermarket on Wednesday made large gains on an outright and dollar-neutral basis, NextEra fell flat with the deal described as more boring paper from an IG energy company.

Global Payments active

Global Payments’ 1.5% convertible notes due 2031 continued to see heavy volume although with little movement in price during Thursday’s session.

The 1.5% notes were changing hands at 101.875 versus a stock price of $130.50 in the late afternoon, according to a market source.

There was $60 million in reported volume.

Global Payments’ stock traded to a low of $129.55 and a high of $131.14 before closing at $129.70, a decrease of 0.19%.

The $2 billion issue was large, liquid and relatively new, which is most likely why they have remained so active, a source said.

LivePerson sinks

LivePerson’s 0% convertible notes due 2026 sank further into distressed territory as stock collapsed after a large earnings miss.

The 0% convertible notes sank 14 points outright with stock off almost 50%.

They were trading at 63 versus a stock price of $1.46 early in the session with the yield about 17.375%, a source said.

The notes continued to plunge as the session progressed and were wrapped around 54 heading into the market close with the yield about 23%.

There was $23 million in reported volume.

LivePerson’s stock traded to a low of $1.21 and a high of $1.75 before closing at $1.27, off 47.08%.

Stock collapsed after the technology company reported losses per share of 10 cents versus the loss per share of 5 cents expected.

However, the company posted a revenue beat of $95.47 million versus the $94.37 million expected.

Shift4 volatile

Shift4’s 0% convertible notes due 2025 were volatile on Thursday after jumping the previous session on reports of competing takeover bids for the company.

The 0% notes continued their upward momentum early in the session.

They climbed 2 points outright with stock adding to gains early in the session.

The notes traded at 123.375 versus a stock price of $89.08 shortly before 11 a.m. ET.

However, they fell alongside stock as the session progressed and were trading at 119.125 heading into the market close.

There was $22 million in reported volume.

The notes jumped about 10 points the previous session.

While volume was lighter, Shift4’s 0.5% convertible notes due 2027 followed a similar trajectory.

The notes were up 2 points outright early in the session to trade at 101.625 versus a stock price of $88.10 early in the session.

However, they came in alongside stock to close the day at 98.5.

Shift4’s stock traded to a low of $81.75 and a high of $92.30 before closing at $82.22, a decrease of 4.28%.

Stock pulled back after surging 10% the previous session on reports that Fiserv and Amadeus were making competing bids for the company.

The company has been exploring strategic alternatives including a sale since November 2023.

Mentioned in this article:

Global Payments Inc. NYSE: GPN

LivePerson Inc. Nasdaq: LPSN

NextEra Energy Partners LP NYSE: NEP

Shift4 Payments Inc. NYSE: FOUR

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