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Morning Commentary: Rivian Automotive convertible notes fall on quiet morning
By Abigail W. Adams
Portland, Me., Jan. 2 – The convertibles secondary space launched the new year quietly with trading activity light as equity and Treasury markets gave back some gains from the phenomenal rally into the final weeks of 2023.
Equity indexes were mixed early in the session with the tech-heavy Nasdaq deep in the red as the Dow Jones industrial average fought back from a low open to positive territory.
The Dow was up 20 points, or 0.05%, the S&P 500 index was down 0.71%, the Nasdaq Composite index was down 1.78% and the Russell 2000 index was down 0.28% shortly before 11 a.m. ET.
There was $50 million in reported convertible bond trading volume about one hour into the session with activity concentrated in investment-grade issues.
However, topical news drove large price movements in Rivian Automotive Inc.’s convertible notes.
The convertible notes sank alongside stock after the EV-maker released fourth-quarter delivery numbers.
The 4.625% convertible notes due 2029 and 3.625% convertible notes due 2030 both fell about 8.5 points outright with stock off 10%.
The 4.625% convertible notes due 2029 were trading at 132.125 versus a stock price of $21.52 early in the session, according to a market source.
There was $2 million in reported volume.
The 3.625% convertible notes due 2030 were trading at 114.375 versus a stock price of $21.68.
There was $3.5 million in reported volume.
Rivian’s stock traded down to $21.00, a decrease of 10.49%, shortly before 11 a.m. ET.
Rivian reported fourth-quarter deliveries of 13,972, which was about a 10% decrease from the previous quarter.
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