Morning Commentary: Affirm convertible notes active, unchanged as activity dwindles

By Abigail W. Adams

Portland, Me., Dec. 22 – While equities remained volatile early Thursday, activity in the convertibles secondary space continued to dwindle as the market enters into the final days of 2022.

The Dow Jones industrial average was down 439 points, or 1.32%, the S&P 500 index was down 1.8%, the Nasdaq Composite index was down 2.55% and the Russell 2000 index was down 1.87% shortly before 11 a.m. ET.

Stocks gave back all gains from Wednesday’s consumer confidence report rally with the market no longer expressing confidence as it awaits Friday’s release of the Personal Consumption Expenditures report, the Federal Reserve’s preferred inflation gauge.

While equities continued to see wild swings, the accounts still active were focused on end-of-year clean-up, a source said.

There was $50 million in reported volume about one hour into the session with only one name seeing more than $5 million in reported volume.

Affirm Holdings Inc.’s 0% convertible notes due 2026 were active yet unchanged early Thursday.

The notes continued to trade around 55.5 with the yield about 15.75%, according to a market source.

There was $5 million in reported volume.

The notes are not equity sensitive with a conversion premium over 230%.

However, Affirm’s stock traded down to $8.86, a decrease of 6.89%, shortly before 11 a.m. ET.

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