Morning Commentary: Snap convertible notes active in early trading on quiet morning

By Abigail W. Adams

Portland, Me., March 7 – It was a relatively quiet morning in the convertibles secondary space as equity markets extended their losses amid the continued conflict in the Ukraine.

The Dow Jones industrial average was down 464 points, or 1.38%, the S&P 500 index was down 1.60%, the Nasdaq Composite was down 1.96% and the Russell 2000 index was down 0.70% shortly before 11 a.m. ET.

“You take your life in your hands trying to find the bottom in this market,” a source said.

There was $83 million in reported convertibles trading volume about one hour into the session with no clear theme to the activity in the space.

Snap Inc.’s in-the-money 0.75% convertible notes due 2026 were the most actively traded notes early in the session with the notes trading down alongside stock.

The 0.75% convertible notes traded down to 160.75 versus a stock price of $31.83 early in Monday’s session, according to a market source.

There was $8 million in reported volume.

Snap’s stock was changing hands at $31.64, a decrease of 4.37%, shortly before 11 a.m. ET.

Snap’s 0.75% notes opened last week around 180 before Snap’s stock fell about 24% as equities sold off.

Snap’s recently priced 0.125% convertible notes due 2028 were not active on Monday and have been slow to trade amid the downturn in its equity last week.

However, the notes changed hands on a 96-handle last Friday.

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