Episode 48 – Profiles in Credit – Morley Conn
August 27, 2020

Episode 48 – Profiles in Credit – Morley Conn

Geoff Castle chats with Morley Conn, Director of Equity Hybrids at Scotiabank Global Banking and Markets.

Subtitle: Opportunities and inefficiencies in the Canadian convertibles market

In this episode Geoff Castle, Fixed Income Portfolio Manager, chats with Morley Conn, Director of Equity Hybrids at Scotiabank Global Banking and Markets. Together they take a deep dive into the convertibles market to uncover the opportunities, inefficiencies and features of convertibles, as well as swapping war stories.

Additional Resources:

Scotiabank Convertible Bond Guide

Convertible Arbitrage: Insights and Techniques for Successful Hedging by Nick P. Calamos

Global Convertible Investing: The Gabelli Way by Hart Woodson

Convertible Securities: The Latest Instruments, Portfolio Strategies, and Valuation Analysis by John P. Calamos

The Complete Guide to Convertible Securities Worldwide by Laura A. Zubulake

Key Takeaways

[01:19] The conversation kicks off with Geoff asking Morley about his start in the convertible bond market.
[04:12] Morley gives a background on the Canadian and US convertibles markets and their relative sizes and differences.
[08:16] Geoff asks Morley for his take on the long-term odds of being involved with the convertible asset class.
[10:42] They discuss what you might find attractive and unexpected about convertibles and Morley shares what he loves most about convertibles.
[13:49] The conversation turns to the inefficiencies of the convertibles market, pricing extremes, opportunists and examples.
[21:10] Morley hones in on several features of a convert, including change of control and why dividend protection on a convert was implemented and how it works.
[31:28] Geoff asks Morley about “the big one”, equitization.
[37:53] Geoff asks what is one of Morley’s all-time favourite stories that has come from trading in the convertibles market.
[39:38] Geoff closes the podcast by asking Morley what he is currently reading.