Morning Commentary: Radius hits aftermarket; Sea, BeautyHealth, BigCommerce notes eyed

By Abigail W. Adams

Portland, Me., Sept. 9 – The convertibles primary market opened the floodgates after a more than two-week hiatus with one new offering pricing and three deals totaling $3.2 billion set to price after the market close.

Radius Global Infrastructure Inc. priced an upsized $230 million of five-year convertible notes after the market close on Wednesday.

The new paper was quiet early in Thursday’s session with only a few trades on the tape.

While the notes sank below par out of the gate, they improved as the session progressed.

While Radius was in focus in the secondary space early Thursday, the primary market readied three new deals, including the largest offering of the year.

Beauty Health Co. (BeautyHealth) plans to price $400 million of five-year convertible notes, BigCommerce Holdings Inc. plans to sell $300 million of five-year convertible notes, and Sea Ltd. plans to price $2.5 billion of five-year convertible notes after the market close on Thursday.

Radius quiet early

Radius priced an upsized $230 million of five-year convertible notes after the market close on Wednesday at the cheap end of talk with a coupon of 2.5% and an initial conversion premium of 30%, according to a company news release.

Price talk was for a coupon of 2% to 2.5% and an initial conversion premium of 30% to 35%, according to a market source.

The greenshoe was also upsized to $34.5 million.

The initial size of the offering was $200 million with a greenshoe of $30 million.

The new paper was quiet early in Thursday’s session with only a few trades on the tape.

They traded as low as 99.125 soon after the opening bell.

“There was some puking going on,” a source said.

However, they improved as the session progressed and were marked at 100.25 bid, 100.75 offered soon after the opening bell.

The notes expanded 0.25 to 0.5 point dollar-neutral, a source said.

Radius’ stock was off slightly early Thursday and was changing hands at $17.28, a decrease of 0.66%, shortly before 11 a.m. ET.

BeautyHealth in focus

BeautyHealth plans to price $400 million of five-year convertible notes to yield 1.5% to 2% with an initial conversion premium of 27.5% to 32.5%.

The deal was heard to be in the market with assumptions of 500 basis points over Libor and a 40% vol., a source said.

Using those assumptions, the deal looked 5.55 points cheap at the midpoint of talk.

BigCommerce eyed

BigCommerce plans to price $300 million of five-year convertible notes after the market close on Thursday with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 32.5% to 37.5%.

The deal was heard to be in the market with assumptions of 375 bps over Libor and a 40% vol., a source said.

Using those assumptions, the deal looked 1.34 points cheap at the midpoint of talk.

Sea megadeal on deck

Sea plans to sell $2.5 billion of five-year convertible notes after the market close on Thursday with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 50% to 55%.

The deal was heard to be in the market with assumptions of 200 bps over Libor and a 40% vol., according to a market source.

Using those assumptions, the deal looked 1.66 points cheap at the midpoint of talk, a source said.

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