Morning Commentary: Snap ‘name of the day’; new convertible notes expand on debut

By Abigail W. Adams

Portland, Me., Feb. 9 – It was an active morning in the convertibles secondary space on Wednesday with a single name accounting for more than half of the reported trading volume – Snap Inc.

Snap is “definitely the name of the day,” a source said, with its latest convertible notes offering making its secondary market debut.

Snap priced an upsized $1.3 billion of six-year convertible notes after the market close on Tuesday at par at the rich end of talk with a coupon of 0.125% and an initial conversion premium of 50%.

Price talk was for a coupon of 0.125% to 0.625% and an initial conversion premium of 45% to 50%, according to a market source.

The new notes dominated activity in the secondary space and expanded on debut.

They traded in a range of 100.5 to 102.25 early in the session as stock fluctuated between gains and losses.

The notes were changing hands at 101.5 versus a stock price of $37.76 about one hour into the session, according to a market source.

There was $187 million in reported volume on the tape, more than half of the total $295 million in total reported volume about one hour into the session.

Snap’s 0% convertible notes due 2027 were the second most actively traded issue.

The 0% notes gained about 1 point outright to trade just shy of 88.5 about one hour into the session.

Snap’s stock wavered between gains and losses before shooting higher with broader equity markets early in the session.

Stock traded down to $37.11 but was changing hands at $38.16, an increase of 1.6%, shortly before 11 a.m. ET.

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