SoFi convertible notes upsize to $1 billion; Brookdale jumps in aftermarket debut

By Abigail W. Adams

Portland, Me., Sept. 29 – The convertibles primary market continued to churn out new offerings as the end-of-quarter approaches with one new offering slated to price after the market close.

SoFi Technologies Inc. plans to price an upsized offering of $1 billion of five-year convertible notes after the market close on Wednesday.

The deal was in demand during bookbuilding and is expected to trade well in Thursday’s session.

Meanwhile, Brookdale Senior Living Inc. priced $200 million of five-year convertible notes after the market close on Tuesday.

While the allocations for the offering were tight, the new paper was active in the secondary space and making large gains on an outright and dollar-neutral basis.

Meanwhile, the secondary space remained quiet on Wednesday as equities attempted to stage a recovery from Tuesday’s brutal sell-off.

The Dow Jones industrial average closed the day up 90 points, or 0.26%, and the S&P 500 index closed the day up 0.16%.

However, there remained some pressure on growth stocks with the 10-year Treasury yield firmly above 1.5%.

The Nasdaq Composite closed the day down 0.24% and the Russell 2000 index closed the day down 0.20%.

Wayfair Inc.’s 0.625% convertible notes due 2025 were active early in the session although the notes were largely unchanged dollar-neutral.

SoFi upsizes

SoFi Technologies’ offering of five-year convertible notes was in demand during bookbuilding with the deal upsizing to $1 billion from $750 million.

While the deal upsized due to strong demand, price talk remained unchanged heading into the market close.

Price talk is for a coupon of 0% to 0.5% and an initial conversion premium of 37.5% to 42.5%, according to a market source.

While the deal modeled cheap based on underwriters’ assumptions, the terms were aggressive, sources said.

The deal was heard to be in the market with assumptions of 325 basis points over Libor and a 42% vol., according to a market source.

Using those assumptions, the deal looked 1.46 points to 1.64 points cheap at the midpoint of talk.

Brookdale jumps

Brookdale Senior Living priced $200 million of five-year convertible senior notes after the market close on Tuesday at par with a coupon of 2% and an initial conversion premium of 35%.

Pricing came at the rich end of talk for a coupon of 2% to 2.5% and an initial conversion premium of 30% to 35%.

The deal was heard to be in demand during bookbuilding despite the bloodletting in equities during Tuesday’s session.

Allocations were heard to be tight among outright accounts.

However, the notes were active in the secondary space.

The notes were changing hands between 104.5 and 105.5 early in the session, a source said.

They traded as high as 106 in the late afternoon.

The notes were expanded about 3 points dollar-neutral, a source said.

Brookdale’s stock traded to a low of $6.10 and a high of $6.42 before closing the day at $6.27, an increase of 4.5%.

Wayfair active

Wayfair’s 0.625% convertible notes due 2025 were active early in Wednesday’s session.

The 0.625% notes were changing hands on a 103-handle.

However, they were largely moving in line with stock, a source said.

Wayfair’s stock traded to a high of $287.90 and a low of $270.06 before closing the day at $270.85, a decrease of 2.69%.

Mentioned in this article:

Brookdale Senior Living Inc. NYSE: BKD

SoFi Technologies Inc. Nasdaq: SOFI

Wayfair Inc. NYSE: W

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