Morning Commentary: Convertibles trading quiet as equities weaken; NextGen adds outright

By Abigail W. Adams

Portland, Me., Oct. 31 – The convertibles secondary space was quiet early Monday as equities gave back some of the strong gains made the previous week.

The Dow Jones industrial average was down 111 points, or 0.22%, the S&P 500 index was down 0.70%, the Nasdaq Composite index was down 1.30% and the Russell 2000 index was down 0.23% shortly before 11 a.m. ET.

Activity in the secondary space was anemic with $27 million in reported volume about one hour into the session.

NextGen Healthcare Inc.’s new 3.75% convertible notes due 2027 remained the most actively traded issue in the secondary space with $3 million in reported volume.

The 3.75% notes continued to add outright after a strong secondary market debut last Friday.

The notes rose another 1.25 points outright with stock up 2%.

The convertibles were changing hands at 104.125 versus a stock price of $19.56 early in the session, according to a market source.

NextGen’s stock was trading at $19.99, an increase of 2.2%, shortly before 11 a.m. ET.

The 3.75% convertible notes rose 3 points outright and expanded 2 points to 2.5 points dollar-neutral on their aftermarket debut last Friday.

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