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Morning Commentary: Avantor prices upsized convertible preferred offering; Ensco active
By Abigail W. Adams
Portland, Me., May 17 – While increasing trade war tensions have roiled capital markets and dampened new issue activity, one convertible deal did price before the week drew to a close.
Avantor Inc. priced a massively upsized $900 million, or 18 million share, offering of three-year $50-par series A mandatory convertible preferred stock after the market close on Thursday.
The deal priced concurrently with Avantor’s $2.8 billion IPO – the second largest to date in 2019.
The three-year $50-par series A mandatory convertible preferred stock priced at the cheap end of talk with a dividend of 6.25% and a threshold appreciation premium of 17.5%.
Price talk had been for a dividend of 5.75% to 6.25% and a threshold appreciation premium of 17.5% to 22.5%, according to a market source.
The greenshoe was also upsized to $135 million, or 2.7 million shares.
The initial size of the offering was $500 million, or 10 million shares, with a greenshoe of $75 million, or 1.5 million shares.
Avantor also priced an upsized 206,999,900 shares of common stock at $14.00 per share.
The public offering carries a greenshoe of 31.05 million shares.
While the number of shares increased from 153,999,900 shares, the public offering price decreased from the initial range of $18.00 and $21.00 per share.
The mandatory convertible preferreds were not active early in Friday’s session with Avantor stock not yet open to trade, a source said.
Meanwhile, Ensco Jersey Financial plc’s 3% convertible notes due 2024 were in focus early in Friday’s session after news broke the company had won a settlement in arbitration court.
The 3% convertible notes were wrapped around 79.375 in active trading. They were up about 0.5 point from the last round lot trade, a market source said.
Ensco was awarded $180 million by an arbitration tribunal in a case against Samsung Heavy Industries stemming from a 2016 case involving losses from a cancelled drill services agreement.
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