Morning Commentary: Global Payments convertible notes offering eyed

By Abigail W. Adams

Portland, Me., Feb. 20 – The convertibles primary market returned to action on Tuesday after a more than two-week hiatus with a sizable offering on deck.

Global Payments Inc. plans to price $1.75 billion of seven-year convertible notes (Baa3/BBB-/BBB) after the market close on Tuesday with price talk for a coupon of 1.5% to 2% and an initial conversion premium of 17.5% to 22.5%.

The deal was heard to be in the market with assumptions of 160 basis points over SOFR and a 27% vol.

Using those assumptions, the deal looked about 3 points cheap at the midpoint of talk, a source said.

The offering looked attractive and was expected to play to strong demand with the investment-grade rating from the payment technology company a boon for the market.

Sources have long been hopeful for some diversification in the wave of investment-grade issuance, which has largely been relegated to energy and utility companies.

The offering was a good sign for the market, sources said.

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