Morning Commentary: Tetra Tech convertibles active, give back gains in early trading

By Abigail W. Adams

Portland, Me., Oct. 12 – The convertibles secondary space saw a quiet start to the session as markets digested the latest Consumer Price Index report.

Equity indices were mixed and Treasury yields elevated after the headline CPI figures came in higher than expected while core CPI was in line with estimates.

The Dow Jones industrial average was down 95 points, or 0.28%, the S&P 500 index was down 0.14%, the Nasdaq Composite index was up 0.12% and the Russell 2000 index was down 1.19% shortly before 11 a.m. ET.

There was $43 million in reported volume about one hour into the session with few names seeing concentrated trading activity.

Recent issue Tetra Tech Inc.’s 2.25% convertible notes due 2028 returned to focus on Thursday with the notes moving lower after popping above par over the past two sessions.

The 2.25% convertible notes were off 0.5 point outright as stock wavered between gains and losses.

The notes were changing hands just shy of 102 early in the session, according to a market source.

There was $5 million in reported volume.

Tetra Tech’s stock was trading at $163.05, a decrease of 1.52%, shortly before 11 a.m. ET.

Tetra Tech’s 2.25% convertible notes have wavered between outright gains and losses since the $575 million issue hit the aftermarket in mid-August.

The notes sank to a 98-handle in early October but popped to a 102-handle over the past few sessions with stock up more than 5% on the week.

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