SoFi Technologies convertible notes in focus, trade up on debut; Radius, Sea improve

By Abigail W. Adams

Portland, Me., Sept. 30 – One name dominated the tape in the convertibles secondary space on Thursday – SoFi Technologies Inc.

SoFi Technologies priced an upsized $1.1 billion offering of five-year convertible notes after the market close on Wednesday.

The demand for the deal seen during bookbuilding followed it into the secondary space with the notes performing well on an outright and dollar-neutral basis.

Outside of SoFi, there was no clear direction to the trading activity in the secondary space as accounts closed the books on the third quarter.

Equity benchmarks remained volatile on Thursday, wavering between gains and losses before closing the day in the red.

The Dow Jones industrial average closed the day down 546 points, or 1.59%, the S&P 500 index closed the day down 0.44%, and the Russell 2000 index finished down 1.19%.

There was $690 million on the tape about one hour before the market close with SoFi accounting for almost half of the reported volume in the space.

End-of-quarter cleanup was the primary driver for trading activity, sources said.

While volume in the names were light, the deals to price over the past month remained well bid, a source said.

Radius Global Infrastructure Inc.’s 2.5% convertible notes due 2026 improved on Thursday although the notes remained below par.

Sea Ltd.’s 0.25% convertible notes due 2026 recovered alongside the company’s equity in active trading.

SoFi in focus

SoFi Technologies priced an upsized $1.1 billion offering of five-year convertible notes after the market close on Wednesday at par with a coupon of 0% and an initial conversion premium of 40%.

Pricing came at the rich end of price talk for a coupon of 0% to 0.5% and at the midpoint of talk for an initial conversion premium of 37.5% to 42.5%.

The greenshoe was downsized to $100 million.

The initial size of the offering was $750 million with a greenshoe of $112.5 million.

The new paper was in demand during bookbuilding and in the secondary space.

The 0% notes were trading in a tight range in heavy volume with 102.375 their volume-weighted-average price early in the session, a source said.

They traded north of 103 in intraday activity but returned to a 102-handle as stock came in.

The notes were expanded about 2.5 to 2.75 points on a dollar-neutral, or hedged, basis.

There was $256 million in reported volume heading into the market close.

SoFi’s stock traded to a high of $16.06 and a low of $15.30 before closing the day at $15.88, a decrease of 0.81%.

Well bid

The deals to price over the past month remained well bid in the secondary space and were continuing to improve on Thursday.

Sea’s 0.25% convertible notes due 2026 rose 1 point with stock up more than 2%.

The notes were changing hands at 101.625 versus an equity price of $322.10 in the late afternoon.

There was about $10 million in reported volume.

Sea’s American Depositary Shares traded to a high of $324.90 and a low of $314.41 before closing the day at $318.73, an increase of 2.28%.

While volume in the name was light, Radius Global Infrastructure’s 2.5% convertible notes due 2026 improved on Thursday.

The 2.5% notes gained about 1 point outright with stock up 1%.

The notes were changing hands at 99.625 versus a stock price of $16.28 in the late afternoon, according to a market source.

Radius’ stock traded to a high of $16.48 and a low of $16.10 before closing the day at $16.33, an increase of 1.05%.

Radius’ 2.5% notes had traded as high as 102 last Friday but dropped alongside stock amid the market sell-off.

Mentioned in this article:

Radius Global Infrastructure Inc. Nasdaq: RADI

Sea Ltd. NYSE: SE

SoFi Technologies Inc. Nasdaq: SOFI

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