Uber Technologies convertible notes improve; CMS trades higher; DigitalOcean active

By Abigail W. Adams

Portland, Me., Nov. 27 – The convertibles primary market was dormant on Monday but is not expected to remain so for long with an end-of-year rush expected before the books close on 2023.

Meanwhile, the secondary space saw a slow start to the week with equity markets either side of unchanged throughout the session.

The Dow Jones industrial average closed Monday down 57 points, or 0.16%, the S&P 500 index closed down 0.20%, the Nasdaq Composite index closed down 0.07% and the Russell 2000 index closed down 0.35%.

There was $73 million in reported convertible bond trading volume about one hour into the session and $421 million on the tape about one hour before the market close.

While quiet, the secondary space remained firm with buyers active in the space, a source said.

Uber Technologies Inc.’s 0.875% convertible notes due 2028, the last deal to clear the primary market, remained in focus with the notes continuing to improve on an outright and dollar-neutral basis.

CMS Energy Corp.’s 3.375% convertible notes due 2028 (Baa2) saw heavy volume on Monday although with little movement in price.

DigitalOcean Inc.’s 0% convertible notes due 2026 were also a top trader during Monday’s session although the notes were unchanged.

Uber improves

Uber’s 0.875% convertible notes due 2028 remained in focus on Monday with the notes continuing to improve on an outright and dollar-neutral basis.

The 0.875% convertible notes added another 0.5 point outright with stock up a little more than 1.5%.

The notes were changing hands at 102.875 versus a stock price of $56.06 early in the session, according to a market source.

They were trading at 103 versus a stock price of $56.29 in the late afternoon.

The notes added another 0.25 point dollar-neutral.

There was $18 million in reported volume.

Uber’s stock traded to a low of $55.29 and a high of $56.46 before closing at $56.06, up 1.34%.

The 0.875% notes have put in a strong aftermarket performance since the $1.5 billion issue priced on Nov. 20.

The strong demand for the paper and its aftermarket performance is a good sign for the market, sources said.

CMS active

CMS Energy’s 3.375% convertible notes due 2028 saw heavy volume on Monday although with little movement in price.

The notes continued to trade on a 97-handle, a level reached in the post-CPI rally of mid-November.

The 3.375% convertible notes were changing hands at 97.375 versus a stock price of $57.23 in the late afternoon, according to a market source.

There was $30 million in reported volume.

CMS’ stock traded to a low of $57.02 and a high of $57.57 before closing at $57.33, off 0.45%.

CMS’ 3.375% convertible notes were trading in the 93 to 94 context heading into November.

DigitalOcean active

DigitalOcean’s 0% convertible notes due 2026 were among the top traders of Monday’s session although with little movement in price.

The 0% convertible notes continued to trade on a 78-handle.

The notes were wrapped around 78.625 in the late afternoon with a yield of 8.125%, according to a market source.

There was $11 million in reported volume.

While not equity sensitive, DigitalOcean’s stock closed on Monday at $28.65, a decrease of 0.80%.

Mentioned in this article:

CMS Energy Corp. NYSE: CMS

DigitalOcean Inc. NYSE: DOCN

Uber Technologies Inc. NYSE: UBER

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