Convertibles primary prices $3.53 billion; Sea, BeautyHealth, BigCommerce notes expand

By Abigail W. Adams

Portland, Me., Sept. 10 – New paper was in focus in the convertibles secondary space on Friday after the primary market priced $3.525 billion over four deals.

The coming week is also expected to be an active one for new deal activity with several deals in the pipeline, source said.

Sea Ltd. priced $2.5 billion of five-year convertible notes, Beauty Health Co. (BeautyHealth) priced an upsized $650 million of five-year convertible notes, BigCommerce Holdings Inc. sold $300 million of five-year convertible notes and Western Asset Mortgage Capital Corp. priced a $75 million offering of three-year convertible notes.

While Western Asset’s offering was not seen on the tape, new paper from Sea, BeautyHealth and BigCommerce dominated activity in the secondary space with all seeing large dollar-neutral expansions.

“It was an exciting day for new issue trading,” a source said.

Radius Global Infrastructure Inc.’s newly priced convertible notes also remained active with the notes improving on an outright and dollar-neutral basis.

Western Asset prices

Western Asset priced a $75 million offering of three-year convertible notes prior to the market open on Friday at par with a coupon of 6.75% and an initial conversion premium of 10%.

Pricing came in line with talk for a fixed coupon of 6.75% and a fixed initial conversion premium of 10%, according to a market source.

The company plans to repurchase $100.3 million of its outstanding 6.75% convertible notes due 2022 with proceeds from the new offering and cash on hand.

The 6.75% convertible notes were tucked away and not active in the secondary space, a source said.

Sea expands

Sea priced $2.5 billion of five-year convertible notes after the market close on Thursday at par with a coupon of 0.25% and an initial conversion premium of 50%.

Pricing came at the midpoint of price talk for a coupon of 0% to 0.5% and at the cheap end of talk for an initial conversion premium of 50% to 55%, according to a market source.

Concurrently, the company priced 11 million American Depositary Shares at a price of $318 per share.

The new paper was in focus in the secondary space and performing “very well,” a source said.

The 0.25% notes traded up to 103 on an outright basis shortly after the opening bell. They remained wrapped around 103 in the late afternoon.

The notes expanded about 2 points dollar-neutral, a source said.

Sea’s ADS traded to a high of $337.54 and a low of $323.62 before closing the day at $325.50, an increase of 0.93%.

BeautyHealth in demand

In a deal that saw a large upsize and priced through talk, BeautyHealth priced $650 million of five-year convertible notes after the market close on Thursday at par to yield 1.25% with an initial conversion premium of 32.5%.

Pricing came richer than initial talk for a coupon of 1.5% to 2% and at the rich end of talk for an initial conversion premium of 27.5% to 32.5%, according to a market source.

The greenshoe was also upsized to $100 million.

The initial size of the offering was $400 million with a greenshoe of $60 million.

The new paper skyrocketed in the secondary space. It traded up to 106 early in the session.

The notes continued to climb as the session progressed and were changing hands at 108 in the late afternoon.

The notes were up 3 to 3.5 points dollar-neutral, sources said.

BeautyHealth’s stock traded to a high of $26.56 and a low of $24.13 before closing the day at $26.16, an increase of 9.14%

BigCommerce gains

BigCommerce priced $300 million of five-year convertible notes after the market close on Thursday at par with a coupon of 0.25% and an initial conversion premium of 37.5%.

Pricing came at the midpoint of talk for a coupon of 0% to 0.5% 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 was changing hands at 102.75 early in Friday’s session. They continued to gain as the session progressed and were trading at 103.5 in the late afternoon.

They were up about 1.25 points on hedge early in the session, a source said. They were seen expanded 2 points in the late afternoon.

BigCommerce’s stock traded to a high of $56.17 and a low of $52.91 before closing the day at $54.84, an increase of 3.14%.

Radius improves

Radius’ 2.5% convertible notes due 2026 improved their second day in the secondary space.

After falling flat on an outright basis on their market debut on Thursday, the notes traded up to 101 Friday afternoon.

They expanded about 0.25 point dollar-neutral, a source said.

Radius’ stock traded to a low of $17.14 and a high of $17.55 before closing the day at $17.39, a decrease of 0.11%.

The notes closed the previous session wrapped around par. However, they expanded about 0.25 point on their aftermarket debut.

Mentioned in this article:

Beauty Health Co. Nasdaq: SKIN

BigCommerce Holdings Inc. Nasdaq: BIGC

Radius Global Infrastructure Inc. Nasdaq: RADI

Sea Ltd. NYSE: SE

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