Convertibles secondary activity at a crawl; BridgeBio lower; PROS higher; DISH active

By Abigail W. Adams

Portland, Me., Aug. 28 – The convertibles secondary space was barely awake on Monday with little expected from the week with large swaths of the market expected to turn the Labor Day weekend into an extended holiday.

While equity indexes were strong on Monday, volumes were well below average and the equity gains inspired little movement in the secondary space.

The Dow Jones industrial average closed Monday up 213 points, or 0.62%, the S&P 500 index closed up 0.63%, the Nasdaq Composite index closed up 0.84% and the Russell 2000 index closed up 0.83%.

There was $35 million on the tape shortly before 11 a.m. ET and $206 million on the tape about one hour before the market close with no issuer cracking more than $10 million in reported volume.

BridgeBio Pharma, Inc.’s 2.5% convertible notes due 2027 were lower alongside stock in active trade.

PROS Holdings, Inc.’s 2.25% convertible notes due 2027 were on the rise in active trade after the company entered into privately negotiated agreements to issue more 2027 notes in exchange for its 1% convertible notes due 2024 last week.

DISH Network Corp.’s 0% convertible notes due 2025 (Caa2/CCC-) also saw some action although with little movement in price.

Sea Ltd.’s 0.25% convertible notes due 2026 were among the most active names early in the session but activity dwindled as the session progressed.

BridgeBio lower

BridgeBio’s 2.5% convertible notes due 2027 were lower alongside stock in active trade on Monday.

The notes were off 1 point outright with stock down almost 3%.

The convertibles were changing hands at 101 versus a stock price of $28.89 in the late afternoon, according to a market source.

There was $8 million in reported volume.

The notes were largely moving in line dollar-neutral, a source said.

BridgeBio’s stock traded to a low of $28 and a high of $30.77 before closing at $28.67, a decrease of 3.4%.

PROS higher

PROS’ 2.25% convertible notes due 2027 were on the rise in active trade after the company entered into a privately negotiated exchange which increased the size of the issue.

The 2.25% convertible notes gained 1.75 points outright with stock up about 2%.

They were seen at 108.25 versus a stock price of $35.79 in the late afternoon.

There was $6 million in reported volume.

PROS’ stock traded to a low of $35 and a high of $36.42 before closing at $35.54, an increase of 1.54%.

PROS entered into a privately negotiated exchange with holders of its 1% convertible notes due 2024 to swap $122 million in principal of the 2024 notes for additional 2027 notes, Prospect News reported.

The exchange ratio will be determined by the VWAP of stock over a 30-day period that began Aug. 24.

DISH active

DISH’s 0% convertible notes due 2025 were active although with little movement in price on Monday.

The notes continued to trade on a 64-handle.

The convertibles were changing hands at 64.25 versus a stock price of $6.01 in the late afternoon.

The yield was about 20.25%.

DISH’s stock traded to a high of $6.22 and a low of $6 before closing at $6.04, up 0.67%.

The notes have given back much of the large gains made since the early August rally sparked by news DISH and EchoStar chair Charlie Ergen was merging the two companies.

The 0% notes shot as high as 70 following the news.

The notes were trading in the 59 to 60 context in early August prior to the merger announcement.

Sea trades

Sea’s 0.25% convertible notes due 2026 were among the most active names early in Monday’s session although activity sputtered out after the early morning trades.

There was little movement in price with the notes remaining on a 79-handle, a level they have maintained since the company’s equity plunged mid-August following a large earnings miss.

The 0.25% notes were trading at 79.25 early in the session with the yield about 8%, according to a market source.

There was $3 million in reported volume.

The long-busted convertible notes are not equity sensitive and trade for their yield.

However, Sea’s American Depositary Shares closed Monday at $36.90, an increase of 2.02%.

While strong on Monday, Sea’s equity has plunged more than 50% since reporting earnings on Aug. 15.

However, the 2026 convertible notes have held at their bond floor with the notes only falling about 1 point outright.

They were trading on an 80-handle headed into their earnings report, according to Trace data.

Mentioned in this article:

BridgeBio Pharma, Inc. Nasdaq: BBIO

DISH Network Corp. Nasdaq: DISH

PROS Holdings, Inc. NYSE: PRO

Sea Ltd NYSE: SE

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