Snap convertible notes in focus, volatile; Block pulls back; Bilibili, Sea active

By Abigail W. Adams

Portland, Me., March 21 – It was another slow start to the week in the convertibles secondary space as equity markets saw a minor pullback after the S&P 500 index and Nasdaq Composite notched their largest weekly gain since November 2020 in last week’s rally.

While indexes were mixed early in the session, they turned negative following hawkish comments from Federal Reserve chair Jerome Powell.

The Dow Jones industrial average closed down 202 points, or 0.58%, the Nasdaq Composite closed down 0.40%, the S&P 500 index closed down 0.04% and the Russell 2000 index closed down 0.97%.

Treasury markets were under pressure with the 10-year Treasury yield climbing as high as 2.321% before settling 14 bps higher at 2.295%.

Trading activity remained muted with $50 million on the tape about one hour into the session and $364 million on the tape about one hour before the market close.

Snap Inc.’s 0.125% convertible notes due 2028 were the most actively traded issue in the secondary space.

While the notes were volatile on an outright basis alongside stock, they continued to improve dollar-neutral.

Block Inc.’s 0.125% convertible notes due 2025 saw a fresh round of activity with the notes giving back some of their outright gains following the previous week’s head-spinning rally.

Bilibili Inc.’s 0.5% convertible notes due 2026 and Sea Ltd.’s 0.25% convertible notes due 2026 were active amid continued volatility in their American Depositary Shares.

Snap in focus

Snap’s 0.125% convertible notes due 2028 were in focus on Monday with the notes volatile on an outright basis.

However, the notes continued to improve dollar-neutral, sources said.

The 0.125% notes traded to a low of 98.125 and a high of 99.75.

They were changing hands at 98.625 versus a stock price of $34.82 in the late afternoon.

However, they closed the day largely flat outright at 99.125.

There was $18 million in reported volume.

The notes expanded about 0.25 point on hedge, a source said.

Snap’s stock traded to a low of $34.20 and a high of $35.77 before closing the day at $35.17, a decrease of 2.31%.

Block pulls back

Block’s 0.125% convertible notes due 2025 gave back some outright gains as stock pulled back from last week’s head-spinning rally.

The 0.125% convertible notes were down about 2 points outright with stock off 4%.

They were changing hands at 131 heading into the market close.

There was about $14 million in reported volume.

Block’s stock traded to a low of $129.64 and a high of $139.73 before closing the day at $134.91, a decrease of 4.07%.

The notes surged on an outright basis alongside stock in a dramatic reversal in the company’s equity.

The notes traded down to 110 in last Monday’s sell-off. However, they climbed 23 points outright to close last Friday at 133.

Block’s stock surged 48% since between Tuesday and Friday last week.

Active ADRs

ADR names remained active on Monday amid continued volatility in their equity.

Bilibili’s 0.5% convertible notes due 2026 were largely unchanged outright as stock dropped 9%.

The notes traded as high as 73.5 in intraday activity but dropped back down to a 72-handle heading into the market resources.

They were changing hands at 72.125 versus an equity price of $24.34 in the late afternoon.

There was $13 million.

Bilibili’s ADS traded to a low of $23.81 and a high of $26.24 before closing the day at $24.91, a decrease of 9.58%.

Sea’s 0.25% convertible notes 2026 were also largely unchanged with its equity down 6%.

The 0.25% notes were trading at 79 versus an equity price of $114.04 in the late afternoon.

There was $12 million in reported volume.

Sea’s ADS traded to a high of 120.99 and a low of $111.54 before closing the day at $114.22, a decrease of 6.79%.

Mentioned in this article:

Bilibili Inc. Nasdaq: BILI

Block Inc. NYSE: SQ

Sea Ltd. NYSE: SE

Snap Inc. NYSE: SNAP

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