Enovis expands in aftermarket debut; Semtech wraps offering; SolarEdge, Enphase plunge

By Abigail W. Adams

Portland, Me., Oct. 20 – The convertibles secondary space was active on Friday as the first new paper of the week made its aftermarket debut.

Enovis Corp. priced $400 million of five-year convertible notes after the market close on Thursday.

Semtech Corp. also successfully placed $250 million of five-year convertible notes after the market close on Thursday amid uncertainty about whether the transaction would be completed after the company’s stock plunged 22% on Thursday.

The new paper hit the secondary space amid continued heaviness in the market as escalations in the Middle East and continued rate uncertainty weighed on risk sentiment.

The Dow Jones industrial average closed Friday down 287 points, or 0.86%, the S&P 500 index closed down 1.26%, the Nasdaq Composite index closed down 1.53% and the Russell 2000 index closed down 1.33%.

Both issues were putting in a strong performance with the notes up on an outright and dollar-neutral basis.

While new paper was in focus, topical news continued to spark large price swings in outstanding issues with solar stocks crushed during Friday’s session.

SolarEdge Technologies Inc.’s slashed revenue forecast and warning about slowing demand in Europe tanked the sector.

SolarEdge’s high-premium 0% convertible notes due 2025 were in focus with the notes falling outright with stock among the worst performers in equity markets.

Enphase Energy Inc.’s convertible notes were also lower in active trade as stock sank double digits on the news.

Enovis expands on debut

Enovis priced $400 million of five-year convertible notes after the market close on Thursday at par at the midpoint of talk with a coupon of 3.875% and an initial conversion premium of 30%.

Price talk was for a coupon of 3.625% to 4.125% and an initial conversion premium of 27.5% to 32.5%.

The offering played to solid demand and was performing well on its aftermarket debut despite the continued heaviness in the market.

The 3.875% notes were changing hands at 100.875 versus a stock price of $44.61 early in the session, according to a market source.

They were trading at 101.875 versus a stock price of $45.06 in the late afternoon.

The notes expanded 1.5 points dollar-neutral, a source said.

Enovis’ stock traded to a low of $44.16 and a high of $45.28 before closing at $44.47, down 0.80%.

Semtech completed

While there was uncertainty about whether the transaction would be completed, Semtech successfully placed its $250 million offering of five-year convertible notes.

The notes priced after the market close on Thursday at par with a coupon of 4% and an initial conversion premium of 27.5%.

The 4a2 private placement was limited to a small group of investors.

While volume was light, the notes jumped in the aftermarket.

They were trading at 104.375 versus a stock price of $16.59 in the late afternoon, according to a market source.

There was $5 million in reported volume.

Semtech’s stock traded to a low of $15.81 and a high of $16.86 before closing at $16.49, up 3.19%.

Stock pared its losses after plunging 22% the previous session after the convertible note offering was announced.

The destruction in stock called into question whether the transaction would be completed with word on the street it had been pulled.

SolarEdge’s shadow

SolarEdge’s high-premium 0% convertible notes due 2025 were lower in heavy volume as stock sank 30% on slashed guidance and a warning about slowing demand.

The 0% convertible notes were down about 2 points outright.

They were changing hands at 87.625 versus a stock price of $82.92 in the late afternoon, according to a market source.

The yield rose to 7.5%.

There was $30 million in reported volume.

SolarEdge’s stock traded to a high of $85.39 and a low of $72.37 before closing at $82.90, a decrease of 27.27%.

SolarEdge’s stock plunged after the company slashed its third-quarter revenue forecast to $720 million to $730 million from the previous forecast of $880 million to $920 million.

Its warning about reduced demand cast a shadow over the industry and sparked a widespread sell-off in solar stocks.

Enphase Energy’s convertible notes were also lower as stock fell double digits.

Enphase’s 0% convertible notes due 2028 were off 2 points outright.

The notes were trading at 78.875 versus a stock price of $98.98 in the late afternoon, according to a market source.

The yield rose to 5.5%.

There was $16 million in reported volume.

Enphase’s 0% convertible notes due 2026 were also off 2 points outright.

They were changing hands at 85.5 versus a stock price of $98.51 in the late afternoon.

The yield rose to about 6.75%

There was $14 million in reported volume.

Enphase’s stock traded to a high of $103.98 and a low of $97.27 before closing at $98.89, a decrease of 14.68%.

Mentioned in this article:

Enovis Corp. NYSE: ENOV

Enphase Energy Inc. Nasdaq: ENPH

Semtech Corp. Nasdaq: SMTC

SolarEdge Technologies Inc. Nasdaq: SEDG

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