Booking Holdings, Health Catalyst convertibles skyrocket; Carnival gains continue

By Abigail W. Adams

Portland, Me., April 9 – The convertibles primary market rounded out an active week with two additional deals pricing, bringing the weekly tally to $2.02 billion.

Booking Holdings Inc. priced $750 million of five-year convertible notes and Health Catalyst Inc. priced an upsized $200 million of five-year convertible notes after the market close on Wednesday.

The new paper hit the secondary space as the market staged a massive rebound following the latest round of central bank stimulus.

While equity markets remained volatile on Thursday, credit spreads tightened significantly after the Federal Reserve announced it would purchase the bonds of fallen angels who were downgraded after March 22.

The latest round of stimulus provided a floor to risk assets and lifted several asset classes, including the convertible market.

There was $250 million on the tape a little over one hour into Thursday’s session and more than $1 billion in reported volume heading into the market close.

Booking Holdings’ and Health Catalyst’s new paper was in focus in the secondary space with both skyrocketing on an outright and dollar-neutral basis.

Carnival Corp.’s 5.75% convertible notes due 2023 also saw high-volume activity with the notes continuing to gain.

Booking dominates

Booking Holdings priced $750 million of five-year convertible notes at the rich end of revised price talk with a coupon of 0.75% and an initial conversion premium of 37.5%.

Talk had been tightened to a coupon of 0.75% and an initial conversion premium of 35% to 37.5% from initial 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 new paper dominated activity in the secondary space and skyrocketed on an outright and dollar-neutral basis.

The 0.75% notes traded as high as 107.75 early in the session with stock up more than 2%.

The convertibles were changing hands at 110.75 with stock up more than 4% in the late afternoon.

The notes were expanded up to 7 points dollar-neutral, a market source said.

The investment-grade rated company’s convertible notes were marketed with a credit spread of 375 bps over Libor.

Following the Federal Reserve’s announcement, the notes were trading with an implied credit spread of 300 bps over Libor, a market source said.

The new 0.75% notes dominated activity in the secondary space with more than $172 million in reported volume about one hour before the market close.

Booking Holdings’ outstanding convertible notes were also active.

The 0.9% convertible notes due 2021 were changing hands at 100.5 versus a stock price of $1,439.29 in the late afternoon with more than $67 in reported volume.

The 0.35% convertible notes due 2020 traded up to 112.5 versus a stock price of $1,430.47 with more than $27 million in reported volume.

Booking Holdings stock traded to a low of $1,403 and a high of $1,450 before closing the day at $1,420.64, an increase of 3.54%.

Health Catalyst expands

Health Catalyst priced an upsized $200 million of five-year convertible notes after the market close on Wednesday at par at the rich end of talk with a coupon of 2.5% and an initial conversion premium of 27.5%.

Price talk was for a coupon of 2.5% to 3% and an initial conversion premium of 22.5% to 27.5%, according to a market source.

The new paper traded as high as 106 shortly after the opening bell. However, the majority of prints were between 104 to 105, a source said.

The notes expanded about 4 points dollar-neutral, a market source said.

The 2.5% notes saw more than $37 million in reported volume.

Health Catalyst stock traded to a low of $23.62 and a high of $25.92 before closing the day at $25.04, an increase of 4.33%.

Carnival gains continue

Carnival’s 5.75% convertible notes due 2023 continued to rise in high-volume activity.

The BBB- rated notes were lifted as credit spreads tightened following the Federal Reserve’s announcement.

The 5.75% notes jumped another 10 points outright to change hands at 144.25 in the late afternoon.

Carnival stock traded as low as $11.92 and as high as $13.73 before closing the day at $12.42, an increase of 3.67%.

The convertible notes have expanded about 15 points dollar-neutral since they priced on April 1, a market source said.

Mentioned in this article:

Booking Holdings Inc. Nasdaq: BKNG

Carnival Corp. NYSE: CCL

Health Catalyst Inc. Nasdaq: HCAT

© 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.