Morning Commentary: Enovix convertibles price overnight; Blackstone Mortgage active

By Abigail W. Adams

Portland, Me., April 18 – The convertibles primary market continued to squeak out deals as the market enters into the heart of earnings season with small wall-crossed offerings and privately negotiated exchanges in play.

In a deal that priced shortly after launching, Enovix Corp. sold $150 million of five-year convertible notes after the market close on Monday at par with a coupon of 3% and an initial conversion premium of 15%.

The deal was tight knit with little information circulated to investors who were not involved, a source said.

The new notes were not active in the aftermarket early in Tuesday’s session.

While Enovix’s new notes were quiet, the convertibles secondary space saw an uptick of activity on a mixed open for equities and a flat day for Treasuries.

Equity indexes launched the day strong but dipped into negative territory as the session progressed as the market digested a wave of bank earnings.

The Dow Jones industrial average was down 128 points, or 0.38%, the S&P 500 index was down 0.03%, the Nasdaq Composite index was down 0.02% and the Russell 2000 index was down 0.37% shortly before 11 a.m. ET.

There was $102 million in reported volume about one hour into the session although few names saw concentrated trading activity.

Blackstone Mortgage Trust Inc.’s 5.5% convertible notes due 2027 were active with the notes weaker amid continued pain for REITs.

The 5.5% notes were off about 0.5 point with the notes trading in round lot prints of 79.375 with a yield of 12.33%, a source said.

However, there were many small prints with the notes trading at 79.

The activity appeared to be retail traders liquidating small positions in the issue, a source said.

There was $10 million in reported volume.

Blackstone Mortgage’s stock was trading at $17.52, a decrease of 2.4%, shortly before 11 a.m. ET.

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