Morning Commentary: Vertex convertibles in focus, gain on debut; Enphase notes active

By Abigail W. Adams

Portland, Me., Oct. 27 – The convertibles secondary space saw an uptick of activity on Wednesday with the first new paper in three weeks hitting the aftermarket.

Vertex Energy Inc. priced $155 million of six-year convertible notes after the market close on Tuesday at 90 with a coupon of 6.25% and an initial conversion premium of 37.5%.

Pricing came in line with price talk for a discounted offer price of 90 and at the midpoint of talk for a coupon of 6% to 6.5% and an initial conversion premium of 35% to 40%, according to a market source.

The new paper was active, despite the small size of the issue, and making large outright gains.

The 6.25% notes were changing hands at 98 early in the session.

They expanded 4 points dollar-neutral.

There was $25 million in reported volume.

Vertex’s stock traded up to $4.56, an increase of 6.78%, shortly before 11 a.m. ET.

Meanwhile, earnings-related volatility sparked activity in some outstanding issues.

Enphase Energy Inc.’s convertible notes were in focus and posting gains on an outright basis as stock surged following a large earnings beat.

Enphase’s 0% convertible notes due 2026 jumped 5.75 points outright with stock up 23%.

The notes were changing hands at 105.25 versus a stock price of $210.91 early in the session.

There was about $12 million in reported volume a little over one hour into the session.

Enphase’s stock was changing hands at $213.73, an increase of 23.22%, shortly before 11 a.m. ET.

Enphase reported earnings per share of 60 cents versus analyst expectations for earnings of 49 cents.

Revenue was $352 million versus analyst expectations for revenue of $345 million.

The solar energy company also provided upbeat guidance with record revenue of $390 million to $410 million expected in the fourth quarter.

© 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.