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Morning Commentary: Integra LifeSciences convertible notes in focus on product recall
By Abigail W. Adams
Portland, Me., May 23 – The convertibles primary and secondary markets saw another sluggish start to the day with no new deals announced and trading volume thin.
Equity markets were mixed in early trading with small cap stocks outperforming as debt ceiling negotiations drag on.
The Dow Jones industrial average was down 10 points, or 0.03%, the S&P 500 index was down 0.33%, the Nasdaq Composite index was off 0.27% and the Russell 2000 index was up 1.01% shortly before 11 a.m. ET.
There was $70 million in reported convertibles trading volume about one hour into the session.
While investment-grade issues remained the general focus of trading activity, topical news pushed outstanding issues into the spotlight.
Integra LifeSciences Holdings Corp.’s 0.5% convertible notes due 2025 saw heavy volume early Tuesday as stock dived double digits after the company issued a recall for all products produced at one of its facilities.
The 0.5% notes fell about 2.75 points outright with stock off almost 13%.
The notes were changing hands at 90.875 early in the session.
There was $9 million in reported volume.
Integra’s stock was trading at $43.81, a decrease of 13.62%, shortly before 11 a.m. ET.
Stock nosedived early Tuesday after the medical device manufacturer issued a recall for all products made at its Boston facility from March 1, 2018 to May 22, 2023.
The recall is expected to result in an impairment charge of $22 million to be recorded in the second quarter, the company said in a press release.
The company issued revenue guidance of $372 million to $376 million and adjusted EPS of 55 cents to 59 cents for the second quarter.
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