Morning Commentary: Expedia convertible notes active on quiet morning; equities rise

By Abigail W. Adams

Portland, Me., Oct. 20 – Trading activity in the convertibles secondary space remained subdued on Thursday with equities strong to start the day despite the continued climb of Treasury yields.

The Dow Jones industrial average was up 293 points, or 0.98%, the S&P 500 index was up 0.77%, the Nasdaq Composite index was up 1.19% and the Russell 2000 index was up 0.88% shortly before 11 a.m. ET.

The strength in equities amid the move in Treasuries was head-scratching, sources said.

However, European buyers and renewed optimism about a soft landing for the economy seemed to be bolstering the market, sources said.

There was $50 million in reported volume about one hour into the session with few names seeing concentrated trading activity.

Expedia Inc.’s 0% convertibles due 2026 (Baa3/BBB-/BBB-) were active although with little movement in price.

The 0% convertible notes were changing hands at 86.125 with a yield flat with Treasuries, a source said.

There was $11 million in reported volume with two $5 million plus trades on the tape.

Expedia’s stock was seen at $97.24, an increase of 0.67%, shortly before 11 a.m. ET.

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