Bentley Systems on deck; Coinbase, MicroStrategy in focus on volatile day for Bitcoin

By Abigail W. Adams

Portland, Me., June 22 – The convertibles primary market returned to action on Tuesday with one offering on deck.

Bentley Systems Inc., which tapped the convertibles market as recently as January, is returning with a $500 million offering of six-year convertible notes that is set to price after the market close on Wednesday.

The notes are being talked with a coupon of 0.125% to 0.625% and an initial conversion premium of 32.5% to 37.5%, according to a market source.

BofA Securities Inc. and Goldman Sachs & Co. LLC are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $75 million.

Meanwhile, in the secondary space, “it’s Bitcoin Day!” a market source said.

Convertible bonds with exposure to Bitcoin were in focus on Tuesday on a volatile day for the cryptocurrency with Bitcoin briefly dipping below $30,000, a key support level, only to again bounce above.

Coinbase Global Inc.’s 0.5% convertible notes due 2026 and MicroStrategy Inc.’s 0% convertible bonds due 2027 topped the volume charts with both notes posting losses on an outright basis.

Etsy Inc.’s recently priced 0.25% convertible notes due 2028 and Splunk Inc.’s convertible notes were also active and posting gains on an outright basis.

While the names in play during Tuesday’s session saw large movements on an outright basis, each issue was moving largely in line dollar-neutral, a source said.

Bitcoin Day

Convertible bonds with exposure to Bitcoin were in focus on Tuesday after the cryptocurrency briefly breached a key support level.

Coinbase’s 0.5% convertible notes due 2026 continued to trend lower.

The 0.5% convertible notes were down more than 2.25 points outright to change hands at 94.625 versus an equity price of $211.70 early in the session.

However, the notes pared their losses alongside stock as the session progressed and returned to a 95-handle.

They were changing hands at 95.125 versus a stock price of $222.67 heading into the market close.

The notes were the most actively traded in the secondary space with about $34 million in reported volume.

While the notes may have contracted slightly early in the morning, they were largely unchanged on a dollar-neutral basis on the day, a source said.

Coinbase’s stock traded to a low of $210.77 and a high of $223.15 before closing the day largely unchanged at $222.47, a decrease of 0.058%.

MicroStrategy’s 0% convertible bonds due 2027 were also active with the notes down on an outright basis.

The notes dropped 5.5 points outright with stock off more than 8% early in the session.

The 0% notes were changing hands at 66 versus a stock price of $514.50.

However, they also pared their losses alongside stock and the price of Bitcoin.

The notes were down about 2.5 points outright heading into the market close.

They were changing hands at 68.75 versus a stock price of $552.48, according to a market source.

The notes move on a light delta.

There was more than $16.5 million in reported volume.

The notes were also holding on a dollar-neutral basis and moving in line with stock, a source said.

MicroStrategy’s stock traded to a high of $564.20 and a low of $513.02 before closing the day at $553.72, a decrease of 5.13%.

Both Coinbase and MicroStrategy were active on Tuesday as Bitcoin breached a key support level of $30,000 early in the session.

However, Bitcoin quickly bounced back and was changing hands at $32,833.14, an increase of 1.31%, shortly before 5 p.m. ET.

Etsy gains outright

Etsy’s recently priced 0.25% convertible notes due 2028 were posting gains on an outright basis as stock popped during Tuesday’s session.

The 0.25% notes were up more than 1.5 points outright with stock up more than 4%.

The notes were marked at 102.25 bid, 102.75 offered in the late afternoon.

There was more than $19 million in reported volume.

While the notes were on the rise on an outright basis, they were unchanged dollar-neutral, a source said.

Etsy’s stock traded to a low of $170.59 and a high of $179 before closing the day at $177.98, an increase of 4.21%.

Splunk active

Splunk’s convertible notes were active on Tuesday as stock popped after the data analytics software company announced a $1 billion investment from Silver Lake.

The 1.125% convertible notes due 2025 jumped 5 points outright with stock up more than 10%.

The notes were changing hands at 119.625 versus a stock price of $139.32 heading into the market close.

However, the notes, which traded rich to begin with, were moving in line with stock, a source said.

There was $14 million in reported volume.

Splunk’s 1.125% convertible notes due 2027 rose 1.5 points to 96.125 with about $10 million in reported volume.

Splunk’s stock traded to a low of $135.21 and a high of $143.33 before closing the day at $139.61, an increase of 11.25%.

Splunk’s stock popped on Tuesday after the company announced that Silver Lake will invest $1 billion in the company by means of convertible notes.

Proceeds from the investment will be used to fund growth initiatives and manage its capital structure, in part, through a new share repurchase program of up to $1 billion, according to a company news release.

Mentioned in this article:

Bentley Systems Inc. Nasdaq: BSY

Coinbase Global Inc. Nasdaq: COIN

Etsy Inc. Nasdaq: ETSY

MicroStrategy Inc. Nasdaq: MSTR

Splunk Inc. Nasdaq: SPLK

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