Convertibles action thins; Rivian Automotive notes decline; Royal Caribbean pressured

By Cristal Cody

Tupelo, Miss., April 12 – The convertibles space stayed mostly quiet on Friday with stocks down across the board.

Equity indices all were down around 1% or more over an hour into the session and continued to slide by the close.

The S&P 500 index finished 1.46% lower, while the Dow Jones industrial average declined 1.24%, the Nasdaq fell 1.62% and the Russell 2000 dropped 1.93%.

Treasury yields also gave back some of the increases made Wednesday after the surprise March inflation data. The benchmark 10-year Treasury note yield closed Friday down 7 basis points to 4.49%.

Overall secondary volume in the convertibles space was under $70 million more than an hour into trading but improved to around $340 million by late afternoon.

“It has been extremely quiet,” a source said. “There’s been one or two buybacks and exchange, but no real money being raised in the market in the last week or two.”

Exact Sciences Corp. on Wednesday issued new convertible notes through an exchange agreement with holders of its outstanding notes, but the new paper has not been in the secondary market so far.

Rivian Automotive Inc.’s convertible notes led the day’s secondary with the paper down around 2 points to 3 points.

Rivian’s stock hit new 52-week lows on Friday after sliding on Thursday on reports that Ford Motor Co. lowered prices on its electric trucks.

Convertible notes overall were pressured and moved lower on Friday, according to market sources.

Some of the biggest declines were seen in Royal Caribbean Cruises Ltd.

Royal Caribbean’s 6% convertible notes due 2025 dropped 14 points, while the stock outright traded over 4% lower.

Exact Science quiet

Exact Sciences’ new 1.75% convertible senior notes due 2031 issued Wednesday in exchange for $359.7 million in principal of the 0.375% convertible senior notes due 2028 and payment to the company of $266.8 million in cash were not seen in the secondary space, according to sources on Thursday and Friday.

The notes were issued through a privately negotiated exchange with existing holders with the conversion premium about 70% with closing not expected until April 17.

The 0.375% notes due 2028 saw thin trading on Friday at 90 but were busier on Thursday and among the most active convertible bonds reported by Trace, going out at 92.70 on more than $5 million of activity.

Exact Sciences’ shares declined 2.21% on Friday to $71.34 after trading from $70.79 to $73.10 over the day.

Rivian declines

Rivian’s 4.625% convertible notes due 2029 dropped more than 1 point early Friday before sliding over 2 points going into the close as the stock sank to a new low, a source said.

The notes were quoted at 69 versus an equity price of $9.17 on more than $41 million of bonds changing hands.

Rivian’s 3.625% convertible notes due 2030 were down about 3 points at a print of 60.53 versus an equity price of $9.19 on over $19 million of activity.

The issue had traded over 2 points lower out of the gate on Friday.

Shares were traded at $9.08 to $9.51 over the day and closed down 4.6% at $9.13, slightly better than the new 52-week low of $9.08 set during the session.

Volume heated up in the stock on Friday with over 57 million shares traded.

Royal Caribbean drops

Royal Caribbean Cruises’ 6% convertible notes due 2025 were pressured from the start of the day, shedding around 9.75 points in early trading before going out down 14 points, a source said.

The issue was last seen at around 260 versus an equity price of $126.71 in light activity totaling over $4 million.

The notes were quoted early in the day at 264.35 with an equity price of $128.54.

Royal Caribbean’s stock was down over 4.3% at $127.97 by noon ET and closed down 4.55% at $127.67.

The stock is well off its 52-week low of $59.37 but down from the annual high of $141.70.

Mentioned in this article:

Exact Sciences Corp. Nasdaq: EXAS

Rivian Automotive Inc. Nasdaq: RIVN

Royal Caribbean Cruises Ltd. NYSE: RCL

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