Convertibles secondary quiet and flat; Duke comes in with stock; onsemi notes improve

By Abigail W. Adams

Portland, Me., April 14 – The primary market saw a smattering of activity over the past week with Mirum Pharmaceuticals Inc.’s $275 million offering of 4% convertible notes due 2029 and Guess?, Inc.’s $275 million issue of 3.75% convertible notes due 2028, which were priced as part of a privately negotiated exchange.

The issues were well received and made large gains in the aftermarket with demand for new paper strong.

Primary activity is expected to remain muted as earnings season commences; however, some smaller wall-crossed offerings are expected.

Meanwhile, the convertibles secondary space was quiet and flat on Friday with equities lower and activity surrounding new paper tempering.

The Dow Jones industrial average closed Friday down 143 points, or 0.42%, the S&P 500 index closed down 0.21%, the Nasdaq Composite index closed down 0.35% and the Russell 2000 index closed down 0.86%.

Duke Energy Corp.’s 4.125% convertible notes due 2026 (Baa2/BBB) continued to dominate the tape with the notes lower outright in line with stock, a source said.

Southern Co.’s 3.875% convertible notes due 2025 (Baa2/BBB) also remained a top volume mover with the notes slightly weaker outright.

However, onsemi’s 0.5% convertible notes due 2029 were stronger on an outright and dollar-neutral basis on Friday.

Guess? gains

Guess?’s new 3.75% convertible notes due 2028 have been quiet in the secondary since the $275 million issue priced as part of a privately negotiated exchange on Thursday.

However, the notes have made large gains since pricing.

The 3.75% notes were not active on the tape on Friday.

However, there was a flurry of late-day activity on Thursday with the notes closing the previous session at 103.75.

They expanded 2 points to 2.25 points on swap, a source said.

Volume movers

Duke’s 4.125% convertible notes due 2026 and Southern Co.’s 3.875% convertible notes due 2025 continued to dominate the tape on Friday with the notes slightly weaker outright after trading flat for the past few sessions, a source said.

Duke’s 4.125% notes were down about 0.375 point outright.

They were changing hands at 101.625 early in the session and closed just shy of 101.75.

There was about $45 million in reported volume.

Duke’s stock traded to a low of $97.33 and a high of $98.31 before closing at $97.64, a decrease of 1.49%.

Southern Co.’s 3.875% notes were off about 0.25 point outright.

They were wrapped around 102.875 throughout the session.

There was $35 million in reported volume.

Southern Co.’s stock traded to a low of $71.68 and a high of $72.33 before closing at $71.94, down 0.72%.

Duke’s and Southern Co.’s convertible notes have seen heavy volume throughout the week with the notes attracting cross-over investors, a source said.

onsemi stronger

onsemi’s 0.5% convertible notes due 2029 were stronger in light volume on Friday.

The 0.5% notes gained about 1 point outright to trade as high as 103.23 early in the session.

They improved about 0.375 point dollar-neutral, a source said.

onsemi’s stock traded to a low of $76.60 and a high of $79.42 before closing at $77.92, up 0.43%.

Mentioned in this article:

Duke Energy Corp. NYSE: DUK

Guess? Inc. NYSE: GES

Mirum Pharmaceuticals Inc. Nasdaq: MIRM

onsemi Nasdaq: ON

Southern Co. NYSE: SO

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