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Morning Commentary: ‘Everyone happy’ with Rapid7, NII Holdings pricings
By Abigail W. Adams
Portland, Me., Aug. 9 – The convertibles space opened Thursday with $300 million in new paper after two upsized deals priced prior to the market open.
Rapid7, Inc. sold an upsized $200 million of five-year convertible notes prior to the market open on Thursday at the cheap end of talk with a coupon of 1.25% and an initial conversion premium of 30%.
Price talk had been for a coupon of 0.75% to 1.25% and an initial conversion premium of 30% to 35%, according to a market source.
The greenshoe was also upsized to $30 million.
The initial size of the deal had been $175 million with a greenshoe of $26.25 million.
The new paper dominated trading activity in the secondary space with $54 million on the tape about an hour into the session. There was good volume in both swap and outright trades.
The notes were seen trading in the 103 to 103.75 range on an outright basis and were expanded about 2 points dollar-neutral, a market source said. Rapid7 stock was up about $1 early Thursday.
“This is just what everyone needed,” a market source said. “Everyone’s happy.”
NII Holdings, Inc. priced an upsized $100 million of five-year convertible notes prior to the market open on Thursday with a coupon of 4.25% and an initial conversion premium of 25%.
Pricing came at the cheap end of talk for a coupon of 3.75% to 4.25% and at the midpoint of talk for an initial conversion premium of 22.5% to 27.5%.
The greenshoe was also upsized to $15 million.
The initial size of the deal had been for $75 million with a greenshoe of $11.25 million.
The notes were not seen trading early in Thursday’s session. The deal was described as “clubby” and was not expected to trade much.
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