Granite Point, Karyopharm launch deals; Splunk bonds find footing; vol. names better bid

By Rebecca Melvin

New York, Oct. 9 – Granite Point Mortgage Trust Inc. and Karyopharm Therapeutics Inc. launched new deals after the market close on Tuesday.

Granite Point, a New York-based real estate investment trust, launched a $125 million five-year note that was talked at a coupon of 6.25% to 6.5% and with a fixed initial conversion premium of 10%.

Newton, Mass.-based Karyopharm Therapeutics announced that it plans to price a $150 million seven-year senior note under Rule 144A.

The notes are non-callable until Oct. 15, 2022 and were being marketed by J.P. Morgan Securities LLC and Leerink as bookrunners.

The clinical-stage pharmaceutical company is focused on drugs directed against nuclear transport and related targets for the treatment of cancer and other major diseases.

In secondary market dealings, both of Splunk Inc.’s convertible issues traded slightly lower on an outright basis but were higher on hedge as shares of the San Francisco-based software company slipped.

The larger $1.85 billion issue of 0.5% five-year Splunk bonds were seen trading at 96, while the 1.125% convertibles due 2025 were seen around 95, a New York-based trader said. The underlying shares were down $1.21, or 1.2%, at $103.78. But they closed at $104.18, which was down only 82 cents.

“Splunk has been very active. And those bonds seem to be finding a level here,” the trader said. The recent new issue had been hurt pretty significantly in the equity sell-off but was regaining ground as a balanced new issue. It was called up about 0.125 point on the morning on a hedged basis.

In general, convertibles were trending well, with traditional vol. names “going better.” Issues of companies like Microchip Technology Inc. and ServiceNow Inc. are examples of this general theme that has developed on the heels of the equity market selling off.

There was a broad focus with “a lot of stuff going on” during the session, the trader said.

Higher delta, vol. names had been dropping with the sell-off in equities, but there was a renewed bid for this type of convertible and they were “richening back up,” the traders said. That said, trading was more “thematic,” rather than in single names.

Granite Point to price

Granite Point was eying an issue of five-year convertibles that were expected to price after the market close. Joint bookrunning managers of the registered deal were Morgan Stanley, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, and Wells Fargo Securities LLC. Co-managers are JMP Securities, Keefe, Bruyette & Woods and Raymond James.

Proceeds will be used to originate or acquire senior floating rate commercial real estate loans and other target assets, and for working capital and other general corporate purposes.

Karyopharm on tap

The Karyopharm convertibles were seen pricing up to $172.5 million of seven-year convertibles including an over-allotment option.

The pharmaceutical company plans to use proceeds from the offering to establish the infrastructure to support a potential commercial launch of selinexor and to support further clinical development of selinexor and other pipeline drug candidates, eltanexor and KPT-9274; and for working capital and other general corporate purposes.

Mentioned in this article:

Granite Point Mortgage Trust Inc. Nasdaq: GPMT

Karyopharm Therapeutics Inc. Nasdaq: KPTI

Microchip Technology Inc. Nasdaq: MCHP

ServiceNow Inc. Nasdaq: NOW

Splunk Inc. NYSE: SPLK

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