Morning Commentary: Spotify convertibles trade below par; Enphase notes drop further

By Abigail W. Adams

Portland, Me., Feb. 26 – The convertibles secondary space remained under pressure on Friday as equities continued to struggle following Thursday’s brutal sell-off.

New paper remained in focus with Spotify Technology SA’s new exchangeable notes for Spotify USA Inc.’s shares making their aftermarket debut on another weak day for the tape.

Meanwhile, Enphase Energy Inc.’s two tranches of senior notes remained under pressure in active trading after a rough debut in the aftermarket on Thursday.

Spotify below par

Spotify Technology priced $1.3 billion of five-year notes exchangeable for Spotify USA’s stock after the market close on Thursday at par with a coupon of 0% and an initial exchange premium of 70%.

Pricing came in line with talk for a fixed coupon of 0% and at the midpoint of talk for an initial exchange premium of 65% to 75%, according to a market source.

The new paper was struggling on its aftermarket debut.

It traded as low as 98.25 and as high as 100.375 early in the session.

The notes were changing hands at 99.5 with stock largely flat shortly before 11 a.m. ET.

Spotify’s stock was $304.97, an increase of 0.63%, shortly before 11 a.m. ET.

Enphase under pressure

Enphase Energy’s new convertible notes remained under pressure early in Friday’s session.

The 0% convertible notes due 2026 were changing hands between 97 and 97.5 early in the session.

The 0% convertible notes due 2028 traded as low as 95 and were changing hands around 96.25 early in the session.

Enphase’s stock was volatile early in the session and traded as low as $163.51 and as high as $173.45 within half an hour of the opening bell.

Stock was $172.22, an increase of 2.9%, shortly before 11 a.m. ET.

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