Morning Commentary: Cytokinetics convertibles add to gains; Booking notes active early

By Abigail W. Adams

Portland, Me., July 5 – It was a quiet return from the long weekend in the convertibles secondary space as equity markets launched the first full trading week of the second half of 2022 with selling.

While equity indexes fought back from their lows, they remained in the red shortly before 11 a.m. ET with the Dow Jones industrial average down 683 points, or 2.2%, the S&P 500 index down 1.85%, the Nasdaq Composite index down 0.78% and the Russell 2000 index down 1.56%.

There was $47 million in reported volume about one hour into the session. However, two issues accounted for almost one-half of the total reported volume in the space – Cytokinetics Inc.’s 3.5% convertible notes due 2027 and Booking Holdings Inc.’s 0.75% convertible notes due 2025 (A3/A-).

Cytokinetics’ 3.5% convertible notes due 2027 continued to rise on an outright basis after a strong aftermarket debut last Friday.

The notes were changing hands at 105.75 versus a stock price of $41.33 early in the session, according to a market source.

There was $8 million in reported volume.

Cytokinetics’ stock was trading a $41.89, an increase of 0.88%, shortly before 11 a.m. ET.

The notes had a strong aftermarket debut on Friday, closing the day up 5 points outright and 3 points dollar-neutral.

Booking Holdings’ notes were also active early Tuesday.

The notes were down 2 points outright with stock off 3% in early trading.

The notes were changing hands at 119.375 versus a stock price of $1,710.40 early in the session.

There was $7 million in reported volume.

However, there were only three trades in the name with the activity most likely due to a repositioning, a source said.

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