CenterPoint Energy convertibles return to par; Ventas falls; Airbnb active post earnings

By Abigail W. Adams

Portland, Me., Aug. 4 – A slow start to the day in the convertibles secondary space gave way to a relatively active session as equity markets continued to see an uptick of volatility.

Equity indexes were initially strong following the release of the latest U.S. nonfarm payrolls report, which gave a mixed view of the labor market.

While job growth came in below expectations in a sign of a cooling labor market, wage growth came in higher than anticipated.

However, selling set in late in the session with indexes closing the day in the red.

The Dow Jones industrial average closed Friday down 150 points, or 0.43%, the S&P 500 index closed down 0.53%, the Nasdaq Composite index closed down 0.36% and the Russell 2000 index closed down 0.20%.

There was $49 million in reported volume about one hour into the session and $450 million on the tape about one hour before the market close.

New paper and earnings continued to drive activity in the secondary space.

CenterPoint Energy Inc.’s 4.25% convertible notes due 2026 (Baa2), the only new deal of the week, returned to par with stock off during Friday’s session.

Ventas Realty, LP’s 3.75% exchangeable notes due 2026 (Baa1/BBB+) fell alongside stock after the REIT posted earnings.

Airbnb Inc.’s 0% convertible notes due 2026 were active but little changed post-earnings.

CenterPoint flat

CenterPoint’s 4.25% convertible notes due 2026 continued to put in an underwhelming performance in the secondary space with the notes returning to par during Friday’s session.

The notes were changing hands at par versus a stock price of $29.24 in the late afternoon, according to a market source.

There was $20 million in reported volume.

CenterPoint’s stock traded to a low of $28.80 and a high of $29.53 before closing at $29.03, down 1.09%.

CenterPoint priced a $900 million offering of the 4.25% convertible notes at par on Tuesday.

It was the first new convertible bond deal to price since late June.

While the notes made modest outright and dollar-neutral gains on their aftermarket debut, they have since given them back.

Ventas falls

Ventas’ 3.75% exchangeable notes due 2026 fell alongside stock after reporting earnings.

The 3.75% notes were down about 2.25 points outright with stock off more than 6.5%.

The notes were changing hands at 100.375 versus a stock price of $45.17 in the late afternoon, according to a market source.

There was $20 million in reported volume.

Ventas’ stock traded to a low of $44.78 and a high of $47 before closing at $44.95, a decrease of 6.78%.

Ventas’ stock dropped despite a large earnings beat with the REIT reporting earnings per share of 17 cents versus analyst expectations of earnings per share of 2 cents.

Revenue was $1.11 billion versus analyst expectations for revenue of $1.10 billion.

However, stock fell with guidance coming in below expectations.

Airbnb active

Airbnb’s 0% convertible notes due 2026 were active but little changed following earnings.

The 0% convertible notes were seen at 88.75 versus a stock price of $142 early in the session, according to a market source.

They were trading at 89.125 versus a stock price of $142.58 in the late afternoon.

There was $19 million in reported volume.

Airbnb’s stock traded to a high of $145.32 and a low of $137.62 before closing at $140.17, off 0.50%.

Airbnb posted a large earnings beat on Thursday with earnings per share of 95 cents versus analyst expectations for earnings per share of 79 cents.

Revenue was $2.48 billion versus analyst expectations for revenue of $2.42 billion.

While earnings were positive, the stock made few gains on the news and remains down about 7% on the week.

However, stock saw a massive run up leading into its earnings report and hit a 52-week high of $154.95 on Monday.

Mentioned in this article:

Airbnb Inc. Nasdaq: ABNB

CenterPoint Energy Inc. NYSE: CNP

Ventas Realty, LP NYSE: VTR

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