iQIYI convertibles expand; Euronet Worldwide active; Verint, Assertio notes make gains

By Abigail W. Adams

Portland, Me., March 28 – With no new deals announced, the convertible secondary market continued to focus on iQIYI Inc.’s newly priced 2% convertible notes due 2025.

The 2% notes rebounded on an outright basis and continued their dollar-neutral expansion during Thursday’s session.

iQIYI’s 3.75% convertible notes due 2023 also remained active in the secondary space.

While iQIYI’s offering was the sole deal of the week, the market is ripe for new issuance, a market source said.

There has not been a lot of selling taking place to make room for new paper, an indication there is money ready and willing to be put to work in the market, the source said.

The terms of iQIYI’s new deal, with the Beijing-based online entertainment service provider able to price a billion-dollar offering less than six months after its initial offering with a lower coupon, is also an indication of the healthy tone of the market.

Meanwhile, Euronet Worldwide Inc.’s 0.75% convertible notes due 2049 were active with the notes continuing to post gains.

Assertio Therapeutics Inc.’s 2.5% convertible notes due 2021 saw large gains on a dollar-neutral basis following a court ruling in favor of the extension of one of the company’s patents.

Verint Systems Inc.’s 1.5% convertible notes due 2021 were also making gains on an outright and dollar-neutral basis as stock broke out to a new 52-week high following the software company’s earnings report.

iQIYI’s gains continue

iQIYI’s newly priced 2% convertible notes due 2025 rebounded off of their lows on an outright basis and continued to expand dollar-neutral on Thursday.

The 2% notes traded up to 101.5 early in Thursday’s session after dropping down to 100.75 Wednesday afternoon.

They were changing hands around 101.625 later in the afternoon.

The notes were improved by 0.25 point dollar-neutral on Thursday after a 2-point dollar-neutral expansion soon after hitting the secondary space on Wednesday, sources said.

The notes remained major volume movers in the secondary space, accounting for $32 million of the $446 million on the tape by the late afternoon.

iQIYI’s 3.75% convertible notes due 2023 also remained active in the secondary space although the notes were little changed.

The 3.75% notes were changing hands around 116.4 in the late afternoon with more than $11 million of the bonds on the tape.

iQIYI’s stock closed Thursday at $22.72, an increase of 0.04%.

Euronet active

Euronet Worldwide’s 0.75% convertible notes due 2049 remained major volume movers on Thursday with the notes continuing to post gains.

The 0.75% notes were seen at 107.25 bid, 108 offered versus a stock price of $142.00 early in the session, a market source said.

They were changing hands at 107 in the late afternoon. More than $19 million of the bonds were on the tape late in the session.

Euronet Worldwide’s stock closed Thursday at $139.98, an increase of 0.34%.

The notes have expanded 6.5 points dollar-neutral since hitting the secondary space in mid-March.

“And it will stay that way,” unless something dramatic happens or the notes hit the 130s and outright accounts sell them, the source said.

Euronet Worldwide is an investment-grade company with a good story, the source said. The notes have been sought after since they hit the secondary market.

Assertio’s large expansion

Assertio’s 2.5% convertible notes due 2021 jumped on an outright and dollar-neutral basis on Thursday after court approval of the extension of one of the specialty pharmaceutical company’s patents.

The 2.5% convertible notes gained about 1.75 points outright.

They were seen changing hands at 75.75 versus a stock price of $4.95 in the late afternoon.

The notes were expanded 2 points dollar-neutral, a market source said.

Assertio stock traded as high as $5.04 before closing Thursday at $4.83, an increase of 6.62%.

The notes from the company formerly known as Depomed jumped after a court of appeals ruling in favor of Assertio.

The court ruled that New Drug Applications by three filers infringed on Assertio’s patent for its Nucynta pain medication.

The ruling gives Assertio market exclusivity until 2025, according to a company news release.

Verint Systems’ new high

Verint Systems’ 1.5% convertible notes due 2021 saw large gains on an outright basis and were slightly improved dollar-neutral as stock broke out to a new 52-week high following its fourth-quarter earnings.

The 1.5% convertible notes rose more than 6 points outright.

They were seen changing hands at 108.75 versus a stock price of $58.01 in the late afternoon.

The notes were improved about 0.25 point dollar-neutral, a market source said.

Verint stock closed Thursday at $58.90, an increase of 14.28%.

The software company’s stock broke out to a new 52-week high following a fourth-quarter earnings beat and strong guidance.

Verint reported non-GAAP earnings per share of $1.08 versus analyst expectations for earnings of $1.01.

Revenue was $336.7 million versus analyst expectations for revenue of $330.2 million.

Verint also raised its guidance for fiscal year 2020 to $3.60 a share on revenue of $1.37 billion.

Mentioned in this article:

Assertio Therapeutics Inc. Nasdaq: ASRT

Euronet Worldwide Inc. Nasdaq: EEFT

iQIYI Inc. Nasdaq: IQ

Verint Systems Inc. Nasdaq: VRNT

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