Vocera, Itron on deck; Everbridge; Eventbrite eyed; Airbnb improves; Enphase sinks further

By Abigail W. Adams

Portland, Me., March 8 – The convertible primary market continued to roll out new deals on Monday with two deals totaling $460 million set to price after the market close and two deals totaling $600 million on deck for Tuesday.

Vocera Communications Inc. plans to price $200 million of five-year convertible notes and Itron Inc. plans to price $400 million of five-year convertible notes after the market close on Tuesday.

Avid Bioservices Inc. is also in the market with $125 million of five-year exchangeable notes.

Everbridge Inc. plans to price $275 million of five-year convertible notes and Eventbrite Inc. plans to price $185 million of long five-year convertible notes after the market close on Monday.

The offerings looked cheap based on underwriters’ assumptions and the talk was becoming more attractive than what had come previously, sources said.

While several recent deals remain underwater in the secondary space, new paper remained in demand with both offerings heard to be oversubscribed.

The new deal activity continued with the rotation from growth to value stocks in full effect in equity markets – a scenario pointed to as a potential risk to the convertibles market.

As the Dow Jones industrial average shot up more than 600 points in intraday activity, the tech-heavy Nasdaq continued to get pummeled.

The Dow Jones industrial average closed the day up 306 points or 0.97%, the S&P 500 closed the day down 0.54%, and the Nasdaq composite down 2.41%.

There continued to be “a lot of pain,” in the convertibles market, a source said.

The “reopening trade” continued to drive Airbnb Inc.’s new 0% convertible notes due 2026 higher with the notes improved on an outright and dollar-neutral basis.

However, several other recent convertible deals continued to falter with Enphase Energy Inc.’s recently priced two tranches of convertible notes continuing to sink.

The calendar

The primary market remained active despite volatile equity markets with two deals totaling $600 million on deck for Tuesday.

Vocera plans to price $200 million of five-year convertible notes after the market close on Tuesday with price talk for a coupon of 0.25% to 0.75% and an initial conversion premium of 32.5% to 37.5%.

Morgan Stanley & Co. LLC, Piper Sandler & Co., and William Blair & Co., LLC are underwriters for the Rule 144A offering, which carries a greenshoe of $30 million.

Itron plans to price $400 million of five-year convertible notes after the market close on Tuesday with price talk for a fixed coupon of 0% and an initial conversion premium of 35% to 40%, according to a market source.

J.P. Morgan Securities LLC and Wells Fargo Securities LLC are bookrunners for the Rule 144A offering, which carries a greenshoe of $60 million.

Avid Bioservices plans to price $125 million five-year exchangeable notes in a Rule 144A offering.

The notes will be issued by Avid SPV LLC and exchangeable for Avid Bioservices shares.

Further details were not available by press time.

Everbridge eyed

Everbridge plans to price $275 million five-year convertible notes after the market close on Monday with price talk for a fixed coupon of 0% and an initial conversion premium of 37.5% to 42.5%, according to a market source.

The deal was heard to be in the market with assumptions of 275 bps over Libor and a 42% vol., according to a market source.

Using those assumptions, the deal looked 2.5 points cheap at the midpoint of talk.

The offering was doing well during bookbuilding. It was heard to be oversubscribed with books closing in the early afternoon.

The “swap out” of the old notes was helping to drive demand for the new offering, sources said.

The company plans to repurchase a portion of its 1.5% convertible notes due 2022 for cash and shares in privately negotiated transactions with proceeds from the new offering.

The 1.5% notes are deep-in-the-money and trade at quadruple par.

They changed hands at 466 on Feb. 22, according to Trace data.

Eventbrite looks cheap

Eventbrite plans to price $185 million of long five-year convertible notes after the market close on Monday with price talk for a coupon of 0.75% to 1.25% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

The deal was marketed with assumptions of 600 bps over Libor and a 45% vol., according to a market source.

Using those assumptions, the deal looked about 1 point to 4.6 points cheap based on where the notes fall in the pricing range, a source said.

Another source saw them as 1.6 points cheap at the midpoint of talk.

The deal was also heard to be oversubscribed during bookbuilding.

The coupon range narrowed to 0.75% to 1% and the conversion premium settled at 30% during bookbuilding, a source said.

Airbnb improves

While several recent issues remained underwater in the secondary space, Airbnb’s 0% convertible notes due 2026 continued to improve.

The notes rose to a 103-handle on Monday.

They were seen changing hands just shy of 103.5 early in the session and remained around 103 heading into the afternoon.

The notes were up another 0.25 point dollar-neutral, a source said.

Airbnb stock traded to a high of $186.40 and a low of $177.03 before closing the day at $180.81, an increase of 0.56%

Enphase down again

Enphase Energy’s two tranches of convertible notes continued their downward spiral on Monday.

The 0% convertible notes due 2028 were changing hands at 89.25 early in the session.

They sank down to an 85-handle in the late afternoon, a source said.

Enphase’s 0% convertible notes due 2026 dropped down to 89 in the late afternoon.

Enphase Energy stock traded to a high of $147.86 and a low of $131.47 before closing the day at $132.06, a decrease of 8%.

Mentioned in this article:

Airbnb Inc. Nasdaq: ABNB

Enphase Energy Inc. Nasdaq: ENPH

Eventbrite Inc. NYSE: EB

Everbridge Inc. Nasdaq: EVBG

Itron Inc. Nasdaq: ITRI

Vocera Communications Inc. NYSE: VCRA

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.