Convertibles pre-holiday trading volume light; Mindbody notes jump on buyout news

By Abigail W. Adams

Portland, Me., Dec. 24 – Not a creature was stirring in the convertibles secondary space on Monday, which saw meager trading volume in the truncated session prior to the Christmas holiday.

There was $7 million on the tape a little more than one hour into the session and not much more was expected for the remainder of the afternoon.

While short, the session was brutal with losses continuing to mount in equities.

The Dow Jones industrial average closed Monday down 653 points – losses which were fueled by the partial government shutdown and Treasury secretary Steve Mnuchin’s weekend phone calls to big banks to inquire about their liquidity.

Mindbody Inc. was “the excitement of the day,” a market source said.

As equity markets continued to plummet, Mindbody’s stock soared on news the company would be taken private in a $1.9 billion buyout by Vista Equity Partners.

However, Mindbody’s 0.375% convertible notes due 2023 only saw one print on the tape early in the session and four additional prints shortly before the market’s early close, sources said.

“That kind of tells you nothing’s going on,” a source said.

While volume was light, the 0.375% convertible notes jumped 10 points outright to trade at 98.5.

The notes were trading up on the takeout that would occur once the deal closes, which is expected in the first quarter, a source said.

The cloud-based business management software company for the wellness services industry announced Monday that it would be acquired by private equity firm Vista Equity Partners.

Vista will acquire all outstanding shares of Mindbody for $36.50 a share, which is a 68% premium from the closing price of Dec. 21.

The notes, which priced at par in June, have been in the mid-80 range since stock sold off after the company reported earnings in November.

Mindbody shares closed Monday at $36.16, an increase of 66.5%.

Stock was $38.10 when the convertible notes priced.

Outside of Mindbody, there was little notable activity in the secondary space, sources said.

Benefitfocus Inc.’s 0.75% convertible notes due 2023 were not on the tape on Monday, their second day in the market.

The deal, which priced after the market close on Thursday, is expected to be the last convertible deal in 2018.

The notes performed well on their market debut on Friday, closing the day north of 103, a source said.

The fourth quarter has been brutal for financial markets and interrupted the primary market’s pace.

Despite the overcast end to the year for the markets in general, the Benefitfocus deal closed out a record setting year for the convertibles primary market on a positive note.

Mentioned in this article:

Benefitfocus Inc. Nasdaq: BNFT

Mindbody Inc. Nasdaq: MB

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.