Morning Commentary: Euronet Worldwide convertible skyrockets; SSR Mining around par

By Abigail W. Adams

Portland, Me., March 14 – Thursday opened with $700 million in new paper hitting the convertible secondary space.

Euronet Worldwide Inc. priced $500 million of 30-year convertible notes and SSR Mining Inc. priced $200 million of 20-year convertible notes after the market close on Wednesday.

The new paper dominated activity in the secondary space, accounting for more than half of the total trading volume early in the session.

While Euronet’s new notes skyrocketed out of the gate, SSR Mining’s new convertibles were largely wrapped around par.

Euronet expands

Euronet priced $500 million of 30-year convertible notes after the market close on Wednesday at par with a coupon of 0.75% and an initial conversion premium of 36%, according to a company news release.

Pricing came richer than initial price talk for a coupon of 1% to 1.5% and an initial conversion premium of 30% to 35%, sources said.

Talk for a coupon was heard to have tightened to 0.875% during bookbuilding. However, the notes priced through the revised talk.

The deal was in demand during bookbuilding with European outright accounts chasing the investment-grade notes, sources said.

The demand followed the notes into the secondary space.

The notes traded up to 103 out of the gate and were seen changing hands just north of 104 about one hour into Thursday’s session.

“They’re investment grade,” a market source said. “That’s why they’re trading so high.”

More than $100 million of the notes had changed hands.

Euronet stock was $141.97, an increase of 2.31%, shortly before 11 a.m. ET.

Euronet’s 1.5% convertible notes due 2044 were also active with the notes changing hands at 194.75. More than $20 million of the bonds were on the tape.

Approximately $94.5 million of the proceeds from the new offering will be used to repurchase $49 million of the 1.5% notes.

The activity surrounding the 1.5% notes appeared to be part of the exchange, a market source said.

SSR volatile

SSR Mining priced $200 million of 20-year convertible notes after the market close on Wednesday at par with a coupon of 2.5% and an initial conversion premium of 35%, according to a company press release.

Pricing came at the cheap end of price talk for a coupon of 2% to 2.5% and at the midpoint of talk for an initial conversion premium of 32.5% to 37.5%.

The notes were trading in a wide range early in Thursday’s session. Pre-opening the notes were 100.25 to 102, a market source said.

However, the notes traded to a low of 99.75 soon after the opening bell but quickly popped back above par.

They were changing hands around 100.25 about one hour into Thursday’s session.

SSR Mining’s stock was $13.13, a decrease of 4.09%, shortly before 11 a.m. ET.

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