Morning Commentary: Convertibles trading light; buyers hard to find; Palo Alto active

By Abigail W. Adams

Portland, Me., March 17 – The convertibles secondary space saw another slow start on Tuesday as equity markets fought to stay in positive territory.

There was $61 million in reported volume about one hour into Tuesday’s session.

The secondary space remained illiquid with buyers hard to find, a market source said.

Palo Alto Networks Inc.’s 0.75% convertible notes due 2023 stood poised for another active session with the notes trading down to a 91-handle.

The 0.75% notes were changing hands at 91.75 early in Tuesday’s session with stock off about 1%.

Palo Alto stock traded as low as $134.66 before rallying to trade up to $138.35, an increase of 0.86%, shortly before 11 a.m. ET.

There was about $6 million in reported volume about one hour into the session.

The notes were also active on Monday when they traded down to the 91 to 92 range.

Palo Alto stock was $208.90 when the company priced a $1.69 billion issue of the convertible notes in July 2019.

BofA Finance LLC’s 0.125% cash-settled equity-linked notes due 2022 tied to Charter Communications Inc. continued to change hands well below their reoffer price on Tuesday.

The notes were trading at 96.5 with $3.5 million in reported volume early in the session, according to a market source.

The 0.125% notes priced in late January at 103.25.

Charter Communications’ stock traded up to $399.27, an increase of 2.61%, shortly before 11 a.m. ET.

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