Morning Commentary: NextEra, Duke convertibles active in early trade; Western Digital up

By Abigail W. Adams

Portland, Me., April 17 – The convertibles primary market remained dormant early Wednesday with sources expecting a third consecutive week with no new deal activity.

However, there was an uptick of activity in the secondary space as broader markets leveled off after the heaviness of the past few sessions.

Equity indexes were either side of unchanged early Wednesday as Treasury yields came in slightly.

The Dow Jones industrial average was down 18 points, or 0.05%, the S&P 500 index was down 0.09%, the Nasdaq Composite index was down 0.25% and the Russell 2000 index was up 0.02% shortly before 11 a.m. ET.

There was $105 million on the tape about one hour into the session with the top two traders accounting for more than one-third of the activity.

And those issues were investment grade.

NextEra Energy, Inc.’s 3% convertible notes due 2027 (Baa1/BBB+) returned to focus with the notes little changed in the heavy volume.

The 3% notes were trading at 105 versus a stock price of $62 early in the session, a source said.

There was $29 million in reported volume.

NextEra’s stock was trading at $62.41, an increase of 1.15%, shortly before 11 a.m. ET.

Duke Energy Corp.’s 4.125% convertible notes due 2026 (Baa2/BBB) were also largely unchanged.

The 4.125% notes were trading at 98 versus a stock price of $93.85 early in the session.

There was $10 million in reported volume.

Duke Energy’s stock was trading at $93.28, an increase of 0.44%.

Outside of high-grade utilities, semiconductor companies remained in demand despite the downturn in the market.

Western Digital Corp.’s 3% convertible notes due 2028 improved in active trade early in the session.

The notes were up 2 points outright with stock up a little over 1%.

They were trading at 153.375 versus a stock price of $72.59 early in the session, according to a market source.

There was $8 million in reported volume.

Western Digital’s stock was trading at $71.70, an increase of 0.91%, shortly before 11 a.m. ET.

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