Morning Commentary: IG convertibles dominate quiet secondary; Southern Co., Duke weaken

By Abigail W. Adams

Portland, Me., April 10 – It was a quiet start to the week in the convertibles secondary space on Monday with the market flat and volume light.

Equity indexes were mixed at the market open with Treasuries weak on the heels of Friday’s U.S. nonfarm payrolls report, which came in largely as expected.

The Dow Jones industrial average was up 3 points, or 0.01%, the S&P 500 index was down 0.47%, the Nasdaq Composite index was down 0.90% and the Russell 2000 index was up 0.59% shortly before 11 a.m. ET.

Investment-grade convertible bond issues continued to dominate the tape with activity concentrated in Southern Co.’s 3.875% convertible notes due 2025 (Baa2/BBB) and Duke Energy Corp.’s 4.125% convertible notes due 2026 (Baa2/BBB).

Southern Co.’s 3.875% convertible notes were off about 0.375 point outright to trade at 102.5.

The notes were moving in line with the weakness in Treasuries and stock, a source said.

Southern Co.’s stock was changing hands at $71.44, a decrease of 1.24%, shortly before 11 a.m. ET.

Duke Energy’s 4.125% convertible notes due 2026 were down about 0.25 point outright and also moving in line, a source said.

The notes were seen at 101.75 in early trading.

Duke Energy’s stock was changing hands at $98.60, a decrease of 1.14%, shortly before 11 a.m. ET.

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