Morning Commentary: Mitek Systems sells upsized convertibles; secondary market active

By Abigail W. Adams

Portland, Me., Feb. 3 – The first new paper of the week entered the secondary space on Wednesday.

Mitek Systems Inc. priced an upsized $135 million of five-year convertible notes after the market close on Tuesday at par with a coupon of 0.75% and an initial conversion premium of 37.5%, according to a company news release.

Pricing came at the rich end of initial price talk for a coupon of 0.75% to 1.25% and richer than initial talk for a conversion premium of 30% to 35%, according to a market source.

The greenshoe was also upsized to $20.25 million.

The initial size of the offering was $125 million with a greenshoe of $18.75 million.

The new paper was not seen on Trace early in the session, a source said.

Meanwhile, the secondary space saw an uptick of activity early in the session with $94 million on the tape.

U.S. Steel Corp.’s 5% senior notes due 2026 were active. The notes were changing hands at 155 early in the session.

There was about $6 million of the bonds on the tape.

U.S. Steel’s stock traded down to $16.34, a decrease of 7.4%, shortly before 11 a.m. ET.

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