Four convertibles totaling $1.66 billion price; new paper trades mixed in secondary

By Abigail W. Adams

Portland, Me., March 12 – The last new convertibles paper in another high-volume week for primary market activity flooded the secondary space on Friday.

Oak Street Health Inc. priced an upsized $800 million of five-year convertible notes, Ivanhoe Mines Ltd. priced $500 million of five-year convertible notes, Bandwidth Inc. sold $250 million of seven-year convertible notes and Invacare Corp. priced an upsized $110 million of five-year convertible notes.

The new paper was mixed on an outright and dollar-neutral basis on its secondary market debut.

Oak Street volatile

Oak Street Health priced an upsized $800 million of five-year convertible notes after the market close on Thursday at par with a coupon of 0% and an initial conversion premium of 42.5%.

Pricing came at the rich end of price talk for a coupon of 0% to 0.5% and the cheap end of talk for an initial conversion premium of 42.5% to 47.5%, according to a market source.

The new paper was volatile on an outright basis.

It traded to a low of 99.625 and a high of 101.625 on an outright basis before settling around par about one hour after the market open.

The notes were marked at 100.25 bid, 100.75 offered in the late afternoon.

Sources saw the notes expanded between 0.25 and 0.5 point dollar-neutral.

Oak Street’s stock traded to a high of $56.87 and a low of $53.78 before closing the day at $56.51, an increase of 1.42%.

Ivanhoe rockets

Ivanhoe Mines sold $500 million of five-year convertible notes after the market close on Thursday at par with a coupon of 2.5% and an initial conversion premium of 37.5%.

Pricing came at the midpoint of talk for a coupon of 2.25% to 2.75% and at the rich end of talk for an initial conversion premium of 32.5% to 37.5%, according to a market source.

The new paper skyrocketed on an outright basis.

The notes traded as high as 105.25 on an outright basis early in the session, a source said, and they continued to trade around 105 heading into the afternoon.

With the underlying equity on the Toronto Exchange, the notes will mostly trade outright, a source said.

Bandwidth below par

Bandwidth priced $250 million of seven-year convertible notes after the market close on Thursday at par with a coupon of 0.5% and an initial conversion premium of 37.5%.

Pricing came at the cheap end of talk for a coupon of 0% to 0.5% and the midpoint of talk for an initial conversion premium of 35% to 40%, according to a market source.

The notes were lagging their issue price on an outright basis.

They traded as high as 100.375 after the opening bell but were changing hands at 98.625 about one hour after the opening bell.

The notes were wrapped around 99 in the late afternoon.

The notes were seen expanded about 0.25 point dollar-neutral early in the session. They were unchanged in the late afternoon, a source said.

Bandwidth’s stock traded to a high of $129.20 and a low of $124.15 before closing the day at $127.72, a decrease of 2.04%.

Invacare gains

Invacare sold an upsized $110 million, from $100 million, of five-year convertible notes after the market close on Thursday at par at the cheap end of talk with a coupon of 4.25% and an initial conversion premium of 27.5%.

Price talk was for a coupon of 3.75% to 4.25% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

The notes were making large gains on an outright and dollar-neutral basis.

They rose to 102.75 one hour after the opening bell and were expanded 2.5 points dollar-neutral, a source said.

They were seen expanded 2 points in the late afternoon.

Invacare’s stock traded to a high of $8.62 and a low of $8.02 before closing the day at $8.49, an increase of 2.78%.

Mentioned in this article:

Bandwidth Inc. Nasdaq: BAND

Invacare Corp. NYSE: IVC

Ivanhoe Mines Ltd. TSX: IVN

Oak Street Health Inc. NYSE: OSH

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