Morning Commentary: Seagate exchangeables weaken; PTC Therapeutics downfall continues

By Abigail W. Adams

Portland, Me., Sept. 18 – It was a quiet start to the day in the convertibles primary and secondary markets with no new deals launching and trading volume thin on a largely flat open for equities.

Equity indexes were either side of unchanged as markets await the Federal Open Market Committee’s Wednesday announcement.

The Dow Jones industrial average was up 13 points, or 0.04%, the S&P 500 index was up 0.55 point or 0.01%, the Nasdaq Composite index was down 0.19% and the Russell 2000 index was down 0.21% shortly before 11 a.m. ET.

Trading volume was light as activity surrounding recent issues continued to settle.

Seagate HDD Cayman’s 3.5% exchangeable notes due 2028 continued to trade with the notes weaker early in the session.

The 3.5% notes were off about 0.375 point outright with stock in the green to start the day.

The 3.5% notes were changing hands at 101.625 in light volume early in the session, according to a market source.

Seagate’s stock was trading at $64.09, an increase of 0.53%, shortly before 11 a.m. ET.

While PTC Therapeutics Inc.’s 1.5% convertibles due 2026 were quiet early Monday, the notes logged double-digit losses in light volume last Friday.

The 1.5% notes plunged from a balanced convertible note to busted territory last Friday as stock plunged 42%.

The notes sank almost 18 points outright last Friday to close the day at 84.25, according to a market source.

They contracted several points dollar-neutral on the move down, a source said.

The yield jumped to 7.5%.

Losses continued to mount for PTC’s stock early Monday, which traded down to $24.55, a decrease of 6.61%, shortly before 11 a.m. ET.

The biopharmaceutical company’s capital structure collapsed after European regulators issued a negative opinion of PTC’s treatment for muscular dystrophy and voted against renewing conditional approval.

PTC has been in the crosshairs since May when it announced after a failed clinical trial that it was discontinuing its gene therapy programs.

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