Morning Commentary: Euronet Worldwide, SSR Mining convertible note offerings in focus

By Abigail W. Adams

Portland, Me., March 13 – The convertibles primary market continued its steady pace of new deal activity with two new deals totaling $700 million set to price after the market close on Wednesday.

While new deal volume continues to trail 2018 year to date, the two new deals would narrow the difference to about $500 million if they price at the size they were launched, according to Prospect News data.

Euronet Worldwide, Inc. plans to price $500 million of 30-year convertible notes and SSR Mining Inc. plans to price $200 million of 20-year convertible notes after the market close on Wednesday.

While longer maturities, the deals are essentially six- and seven-year paper, respectively, due to the put options, sources said.

The deals looked cheap based on underwriters’ assumptions.

Euronet on tap

Euronet Worldwide plans to price $500 million of 30-year convertible notes after the market close on Wednesday with price talk for a coupon of 1% to 1.5% and an initial conversion premium of 30% to 35%.

The notes are non-callable for 3.5 years, callable subject to a 130% hurdle for 2.5 years and are then freely callable.

They are putable in 2025, 2029, 2034, 2039 and 2044.

The deal is being marketed with a credit spread of 175 basis points over Libor and a 28% vol., according to a market source.

Sources pegged the deal between 0.6 point cheap to 1 point cheap.

The deal is being done as a happy meal, a market source said.

A portion of the proceeds will be used to repurchase $100 million of the company’s common stock, which will help with hedging activity.

Euronet Worldwide will also use proceeds to redeem its outstanding 1.5% convertible notes due 2044.

The 1.5% notes have been callable since April 2018, subject to a 130% hurdle.

There are $402.5 million of the notes outstanding, according to Trace data.

SSR Mining eyed

SSR Mining plans to price $200 million 20-year convertible notes after the market close on Wednesday with price talk for a coupon of 2% to 2.5% and an initial conversion premium of 32.5% to 37.5%.

The notes are non-callable for four years, callable until year seven subject to a 130% hurdle and then freely callable.

There are investor puts in years seven, 10 and 15 with the notes essentially seven-year paper due to the put.

The deal is being marketed with a credit spread of 450 bps over Libor and a 36% vol., according to a market source.

The deal looked to be about 1.5 points cheap at the midpoint of talk, a source said. Another source pegged the deal 1.7 points cheap.

Proceeds will be used to purchase a portion of the company’s 2.875% convertible notes due 2033.

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