Morning Commentary: Bilibili convertible notes active early, gain on quiet morning

By Abigail W. Adams

Portland, Me., May 31 – It was a quiet return from the Memorial Day weekend in the convertibles secondary space with equity markets launching the day in the red as the Federal Reserve’s balance sheet runoff commences.

The Dow Jones industrial average was down 193 points, or 0.59%, the S&P 500 index was down 0.55%, the Nasdaq Composite index was down 0.46% and the Russell 2000 index was down 0.99% shortly before 11 a.m. ET.

There was $74 million in reported volume about one hour into the session.

Bilibili Inc.’s 0.5% convertible notes due 2026 were in focus and making gains on a strong day for the company’s equity.

The long-busted 0.5% notes rose 1.5 points outright.

They were changing hands at 67.5 versus an equity price of $22.41 early in the session with a yield of 17%, according to a market source.

There was $5 million in reported volume.

The Shanghai-based video sharing website’s American Depositary Shares were trading at $23.14, an increase of 8.04%, shortly before 11 a.m. ET.

Bilibili was riding a wave of recent strength in the ADR space as China begins to reopen from its most recent Covid lockdown.

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