Morning Commentary: Evergy convertible notes active in early trading on index addition

By Abigail W. Adams

Portland, Me., Jan. 11 – It was a quiet start to the day in the convertibles secondary space as markets digested the latest Consumer Price Index report, which came in stronger than expected.

Equity markets were in the red but Treasuries largely flat in the initial response to the report, which reflected an uptick in inflation but not by enough to change the market’s expectations.

The Dow Jones industrial average was down 159 points, or 0.42%, the S&P 500 index was down 0.50%, the Nasdaq Composite index was down 0.51% and the Russell 2000 index was down 1.43% shortly before 11 a.m. ET.

There was $82 million in reported volume about one hour into the session with a single name accounting for more than one-quarter of the total activity in the space.

Evergy Inc.’s 4.5% convertible notes due 2027 (Baa2/BBB) saw heavy volume as the issue entered the Refinitiv convertible indices.

While active, the notes saw little movement in price.

They were changing hands at 103.625 versus a stock price of $54.04 early in the session, according to a market source.

There was $23 million in reported volume.

Evergy’s stock was trading at $53.29, a decrease of 1.45%, shortly before 11 a.m. ET.

Evergy’s convertible notes have seen heavy volume in the run-up to their addition to the Refinitiv indexes with the notes added at the monthly rebalance on Thursday.

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