AMAG, HubSpot add deals to calendar; Tesla drops ahead of earnings; Akamai trades off

By Stephanie N. Rotondo

Seattle, May 3 – Two new convertible bond issues were added to the forward calendar after the market closed on Wednesday.

AMAG Pharmaceuticals Inc. announced a $250 million offering of convertible senior notes due 2022, with price talk for a 2.75% to 3.25% yield and an initial conversion premium of 37.5% to 42.5%.

J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are running the books.

Also announced was a $300 million Rule 144A offering of convertible senior notes due 2022 from HubSpot Inc.

Price talk on that issue is for a 0.5% to 1% yield and an initial conversion premium of 30% to 35%.

BofA Merrill Lynch, Morgan Stanley and JPMorgan are running the deal.

Both issues are expected to price after Thursday’s close.

More earnings were coming out Wednesday, which was pushing around more issues in the convertible bond market.

Tesla Inc. brought its latest results after the market’s close, showing a wider net loss but higher revenue.

Ahead of the earnings release, the company’s convertible bonds were under pressure.

Meanwhile, Akamai Technologies Inc.’s reported its first-quarter late Tuesday, beating expectations on both the top and the bottom lines. But revenue guidance for the current quarter came in lower than expected, which was not favorable for the company’s 0% convertible notes due 2019.

FireEye Inc. also posted earnings after Tuesday’s close. Like Akamai, the figures beat expectations. Unlike Akamai, better-than-expected guidance helped the 1.625% convertible notes due 2035 add a little ground.

Looking ahead, Great Plains Energy Inc. is slated to bring its quarterly results on Thursday. Thursday is also the deadline for which the company can file to appeal the Kansas Corporation Commission’s rejection of Great Plains’ merger with Westar Energy Inc.

It didn’t appear that investors had a lot of hope for the deal, as the 7% series B mandatory convertible preferreds (NYSE: GXPPrB) fell 11 cents to $53.20. The company’s stock was also lower, declining 12 cents to $28.83, in above average trading.

AMAG to price deal

AMAG Pharmaceuticals plans to price $250 million of five-year convertible senior notes.

There is a $37.5 million over-allotment option.

Prior to March 1, 2022, the notes are contingently convertible. After that date, the notes can be converted at any time.

Conversions will be settled in cash, stock or a combination.

The notes are non-callable for life and are putable only upon a fundamental change.

Proceeds will be used, along with cash on hand, to repay and terminate the company’s 2015 term loan facility.

The announcement of the new deal comes on the heels of the company’s earnings release late Tuesday.

AMAG posted a loss of $1.06 per share, versus a loss of 22 cents a share the year before.

Zacks Consensus Estimate called for earnings per share of 9 cents.

On an adjusted basis, EPS was 99 cents.

Revenue improved 27.6% to $139.5 million.

Though revenues were better year over year, it missed expectations.

Ahead of pricing, the company’s stock was off 95 cents, or 4.43%, to $20.50.

AMAG is a Waltham, Mass.-based biopharmaceutical company.

HubSpot in the market

HubSpot will bring a $300 million Rule 144A offering of five-year convertible senior notes, the company said Wednesday.

There is a $50 million greenshoe.

The convertible debt is non-callable for life. The paper is contingently convertible, should the stock hit a 130% price hurdle.

A portion of the deal’s proceeds will be used to fund hedging transactions. The remaining funds will be used for general corporate purposes.

Like AMAG, the announcement of the new issue came after the company posted first-quarter results on Tuesday.

The company posted an adjusted net loss of 22 cents, better than the loss of 33 cents that Zacks Investment Research had forecast.

Revenue rose 40% to $82.3 million.

The company’s shares traded up on the earnings beat, adding $5.20, or 7.8%, to close at $71.85.

HubSpot is a Cambridge, Mass.-based inbound marketing and sales platform.

Tesla fades ahead of results

Tesla posted a wider net loss after Wednesday’s close, though revenue more than doubled.

The improved revenue figures were due in part to the fact that SolarCity’s results were included.

Prior to the earnings release, Tesla’s convertibles – as well as its stock – were waning.

The 2.375% convertible notes due 2022 were pegged in a 111.5 to 112.5 context, a loss of about 2 points, a market source reported. The 0.25% convertible notes due 2019 fell to 105.5 versus 106.5 previously.

The equity dropped $8.12, or 2.55%, to $310.76.

For the quarter, Tesla reported a net loss of $330.3 million. That compared to a loss of $282.3 million the year before.

On a per share basis, the loss was $2.04 a share, versus $2.13 a share the previous year.

On an adjusted basis, the loss per share came to $1.33. Analysts polled by Thomson Reuters had forecast a loss of 81 cents.

Revenue pushed up to $2.7 billion from $1.15 billion.

Analysts had expected to see revenue of $2.62 billion.

The San Carlos, Calif.-based automaker also said it was on track to mass market its new Model 3 sedan later this year.

Akamai loses ground

Akamai Technologies’ 0% convertibles hit lows around 97.75 on Wednesday, which compared to previous levels closer to par.

The equity was meantime getting hammered, falling $9.70, or 15.52%, to $52.80.

The weakness in the name came after the company reported earnings that were less than stellar.

Additionally, the company gave guidance for the second quarter that failed to impress.

For the quarter, Akamai reported adjusted EPS of 69 cents on revenue of $609 million.

For its part, revenue was up 7% year over year.

The figures beat analysts’ expectations.

However, second-quarter guidance of EPS of 61 cents on revenue of $609 million – at the high end – were well below analysts’ projections of 65 cents EPS on revenue of $623 million.

Akamai is a Cambridge, Mass.-based content delivery network and cloud services provider.

FireEye beats

FireEye’s convertible debt was boosted after the company reported results that beat expectations.

The 1.625% convertible notes due 2035 were seen hovering around 91. A source also saw the 1% convertible notes due 2035 ticking up about half a point to 95 bid, 95.25 offered.

The underlying stock was up smartly, rising $1.57, or 12.86%, to $13.78.

For the quarter, FireEye came with an adjusted loss per share of 9 cents on revenue of $173.7 million.

Analysts polled by Thomson Reuters had expected an adjusted loss per share of 22 cents on revenue of $163.7 million.

In addition to beating on the top and bottom lines, FireEye also said its gross profit margin rose to 73% year over year. That was better than the company’s forecast of about 70%, which was the same level it was at in the first quarter of 2016.

FireEye is a Milpitas, Calif.-based cyber security firm.

Mentioned in this article:

Akamai Technologies Inc. Nasdaq: AKAM

AMAG Pharmaceuticals Inc. Nasdaq: AMAG

FireEye Inc. Nasdaq: FEYE

Great Plains Energy Inc. NYSE: GXP

HubSpot Inc. NYSE: HUBS

Tesla Inc. Nasdaq: TSLA

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