Morning Commentary: Barclays synthetic, Vertex convertible notes offerings in focus

By Abigail W. Adams

Portland, Me., April 23 – The convertibles primary market returned to action with two deals slated to price after the market close on Tuesday.

Vertex Inc. plans to price $250 million of five-year convertible notes and Barclays Bank plc plans to price $350 million of five-year cash-settled equity-linked notes tied to Eli Lilly Co. after the market close on Tuesday.

The deals looked attractive and were expected to play to strong demand with the market hungry for new paper, sources said.

Vertex eyed

Vertex plans to price $250 million of five-year convertible notes after the market close on Tuesday with price talk for a coupon of 0.75% to 1.25% and an initial conversion premium of 27.5% to 32.5%.

The deal was heard to be in the market with assumptions of 275 basis points over SOFR and a 42% vol.

Using those assumptions, the deal looked about 1.75 points cheap at the midpoint of talk, a source said.

Synthetic on deck

Barclays plans to price $350 million of five-year cash-settled equity-linked notes tied to Eli Lilly after the market close on Tuesday with price talk for a fixed coupon of 0.25% and a fixed conversion premium of 31%, according to a market source.

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