PTC Therapeutics, Adesto, Ubisoft pricing convertibles; trading light amid Fed meeting

By Rebecca Melvin

New York, Sept. 17 – The convertibles primary market came to life after the market close on Tuesday, following a quiet session and expectations that issuers would stand pat until after the U.S. Federal Reserve policy setting meeting, which concludes on Wednesday.

There were a pair of deals announced in the United States, a deal that was heard to have priced in euros from a French issuer, and a bought deal that priced in Canada.

South Plainfield, N.J.-based biopharmaceutical company PTC Therapeutics Inc. announced that it plans to price $250 million of convertible senior notes due 2026.

The notes, which were being marketed on an overnight basis, were heard talked to yield 1% to 1.5% with an initial conversion premium of 30% to 35%, according to market sources.

The company is also pricing a $100 million secondary offering of common stock at a share price talked at $40.30 to $41.30.

The idea that a convertible deal was pricing together with a stock offering on a fast turnaround, overnight basis was noted as being unusually aggressive on the part of the issuer, according to one market source.

Adesto on tap

Also in the U.S. market, Adesto Technologies Corp. announced that it plans to price $70 million of five-year convertible senior notes.

The small deal was being talked to yield 4.25% to 4.75% with an initial conversion premium of 27.5% to 32.5%, according to a market source.

The Rule 144A deal has a 15% greenshoe and was being sold via bookrunner Cowen Group. Final pricing is expected after the market close on Wednesday.

The notes are non-callable for three years and then provisionally callable at a 130% price hurdle.

The proceeds will be used to repay Adesto’s existing term loan in full, and a portion will be used to pay the cost of capped call transactions, with any remainder earmarked for general corporate purposes.

In connection with the offering, Adesto expects to enter into privately negotiated capped call transactions with one of more financial institutions.

The semiconductors and embedded systems maker is based in Santa Clara, Calif.

Ubisoft brings Oceanes

In Europe, Ubisoft Entertainment SA was said to have priced a €500 million issue of non-interest bearing five-year convertible bonds in the Oceanes structure.

The final terms could not be confirmed by Prospect News’ deadline, but it was heard that the deal was talked at a price of 103.25% to 105.25% of par and with an issue premium of 55% to 60%.

Concurrently with the issue, Ubisoft announced its early redemption of an existing issue of about €400 million Oceanes due 2021.

The net proceeds of the new Oceanes will finance the general needs of the company, including possible future acquisitions, and the refinancing of existing debt, according to a company news release.

The bonds settle on Sept. 24 and mature on Sept. 24, 2024. They are non-callable until Sept. 24, 2022 and then provisionally callable at a price hurdle of 130%.

The video-game company is based in Montreuil, France.

BTB REIT eyed

From Canada, BTB Real Estate Investment Trust sold C$24 million of 6% five-year convertible unsecured subordinated debentures on a bought-deal basis and with an initial conversion premium of 15%, according to a news release on Tuesday.

The issue, which is being distributed in Canada under a short form prospectus, has an initial conversion price is C$5.42 and matures on Oct. 31, 2024.

The deal was brought by a syndicate of underwriters led by National Bank Financial Inc. and including Scotiabank, TD Securities Inc., Echelon Wealth Partners Inc., Laurentian Bank Securities Inc., Raymond James Ltd. and Industrial Alliance Securities Inc.

Proceeds are earmarked to redeem C$23 million of the company’s series E convertible debentures due March 31, 2020 and for general corporate purposes.

BTB is a Montreal-based real estate investment trust.

In the secondary market, volumes were light in the convertibles space on Tuesday as market players seemed to pause as the U.S. Federal Reserve began its regularly scheduled policy makers’ meeting.

The Federal Open Market Committee wraps up its meeting on Wednesday, and although the economic picture has gotten a little murky of late, most market players still expect a 0.25% rate cut to be taken. “The big question is what they will say in terms of the outlook for the direction going forward,” a New York-based trader said.

Secondary in focus

Transocean Ltd.’s 0.5% convertibles due 2023 pulled back in tandem with a retreat in oil prices that occurred after a Saudi report that production capacity damaged by a drone attack may go back online sooner than expected.

“Transocean was likely a mover on the spike in oil prices,” a market source said. On Tuesday the convertibles peeled back to 92.75 to 93.25 after spiking to 96.25 on Monday afternoon. Meanwhile shares of the oilfield services company pulled back 41 cents, or 6.3%, to $6.10. Shares had jumped 11.5% on Monday.

New Relic Inc., which also has a convertible with a 0.5% coupon and due 2023, traded at 94.9, which was a bit above the recent range of 93 to 94.5. Shares of the San Francisco-based software analytics company traded up $2.98, or 5%, in early trade to $61.20.

Booking Holdings Inc.’s sister convertibles were among the more actively traded convertibles in an extension of Monday’s session trends.

Mentioned in this article:

Adesto Technologies Corp. Nasdaq: IOTS

Booking Holdings Inc. Nasdaq: BKNG

BTB Real Estate Investment Trust: Toronto: BTB.UN

New Relic Inc. Nasdaq: NEWR

PTC Therapeutics Inc. Nasdaq: PTCT

Transocean Inc. NYSE: RIG

Ubisoft Entertainment SA OTC: UBSFY

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.