Convertibles trading ‘anemic’; Enovis active; DexCom lower; Anywhere Real Estate up

By Abigail W. Adams

Portland, Me., Oct. 26 – The convertibles secondary space was quiet on Thursday with trading volume light as markets digested the latest macro data.

Equity indexes were mixed after the latest Gross Domestic Product report blew past expectations with the consumer-powered economy growing at the fastest clip since 2021.

However, the report also contained a lower-than-anticipated quarterly personal consumption expenditure print with the monthly PCE report slated for release on Friday.

The data continued to fuel ambiguity about the future rate environment, sources said.

Equity indexes were mixed with the tech heavy Nasdaq Composite the laggard while the small cap index outperformed.

The Dow Jones industrial average closed Thursday down 252 points, or 0.76%, the S&P 500 index closed down 1.18%, the Nasdaq Composite index closed down 1.76% and the Russell 2000 index closed up 0.34%.

Treasuries responded favorably to the data with yields coming in after a double digit climb the previous session.

The 10-year Treasury yield closed Thursday at 4.845%.

There was $27 million in reported convertibles trading volume about one hour into the session and $325 million on the tape about one hour before the market close with no name seeing more than $10 million in reported volume, sources said.

“It’s anemic out there,” a source said.

The market tone remained heavy after the widespread contraction of the previous session although the heavy selling in the space tempered.

Enovis Corp.’s recently priced 3.875% convertible notes due 2028 were among the most active issues with the notes moving lower alongside stock.

DexCom Inc.’s 0.25% convertible notes due 2025 continued to see selling pressure with the notes lower in active trade.

While activity in the name tempered as the session progressed, Anywhere Real Estate Inc.’s (formerly Realogy Group LLC) 0.25% exchangeable notes due 2026, were active early in the session with the notes edging higher on the heels of earnings.

Enovis active

Enovis’ recently priced 3.875% convertible notes due 2028 were among the most actively traded issues on a quiet day for the secondary space with the notes moving lower alongside stock.

The 3.875% notes were off 0.5 point outright with stock down about 1.5% in intraday activity.

The notes were changing hands at 101.625 versus a stock price of $43.44 in the late afternoon.

There was $9 million in reported volume.

Enovis’ stock traded to a low of $43.04 and a high of $44.21 before closing at $43.67, off 1.06%.

While lower on Thursday, the notes have performed well in the aftermarket since the $460 million issue priced on Oct. 19.

Underwriters recently exercised the greenshoe in full, which may have contributed to the activity in the name, a source said.

DexCom lower

DexCom’s 0.25% convertible notes due 2025 continued to see selling pressure on Thursday.

The notes fell about 1 point outright.

They were trading at 93.25 in the late afternoon.

The yield was about 3.75%.

There was $8 million in reported volume.

DexCom’s stock traded to a low of $80.92 and a high of $84.23 before closing at $81.09, down 3.86%.

However, the high-premium notes are not equity sensitive and have largely traded for their yield.

While the stock of the maker of glucose monitoring systems for diabetes management took a hit in mid-October as the Ozempic effect rattled markets, the 0.25% convertible notes held up well.

The notes have largely recouped their losses since trading down to a 91-handle amid the sell-off in mid-October.

Anywhere Real Estate higher

Anywhere Real Estate’s 0.25% exchangeable notes due 2026, an off-the-run issue that rarely trades in volume, saw some action on Thursday.

The high-premium notes edged higher in active trade early in the session on the heels of earnings.

The 0.25% notes were up about 0.25 point outright.

They were trading at 74.5 early in the session with the yield about 11.875%, a source said.

There was $3 million in reported volume.

While not equity sensitive, Anywhere Real Estate’s stock saw a strong session with the notes closing the day at $4.67, an increase of 7.36%.

Anywhere Real Estate reported mixed earnings earlier in the week with the company missing on the bottom line but beating on the top.

The company’s straight debt responded favorably to the report with the company engaged in a series of cost reduction and debt reduction measures, sources said.

Its junk bonds jumped 2 to 4 points on Tuesday after the earnings release.

Mentioned in this article:

Anywhere Real Estate Inc. NYSE: HOUS

DexCom Inc. Nasdaq: DXCM

Enovis Corp. NYSE: ENOV

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