Calendar balloons; Dominion Energy, Vonage, Zynga on tap; Coupa Software gains continue

By Abigail W. Adams

Portland, Me., June 10 – The convertibles primary market was in high gear on Monday with three new deals totaling $2.15 billion announced after the market close.

Dominion Energy Inc. plans to price $1.25 billion in $100-par series A equity units, Vonage Holdings Corp. plans to price $300 million of five-year convertible notes and Zynga Inc. plans to price $600 million of five-year convertible notes after the market close on Tuesday.

With equities continuing their upward momentum in response to a trade deal between the United States and Mexico, issuers were coming out of the woodwork to get deals done.

Meanwhile, the secondary space saw decent trading volume for a Monday with about $80 million on the tape about one hour into the session and $343 million in reported volume heading into the market close, sources said.

There was a wide breadth to the names in play, with few seeing concentrated activity. However, one name continued to dominate the secondary space.

Coupa Software Inc.’s newly priced 0.125% convertible notes due 2025 remained in focus with the notes continuing to improve on an outright and dollar-neutral basis.

Outside of Coupa’s new paper, the convertible notes of several China-based corporations were active and making gains on an outright basis alongside their equity.

iQIYI Inc.’s convertible notes and Bilibili Inc.’s 1.375% convertible notes due 2026 were in focus as the market again expressed optimism surrounding the thawing of trade relations.

DexCom Inc.’s convertible notes were making gains on an outright basis as stock jumped following news of a collaboration with Companion Medical.

The calendar

The calendar ballooned on Monday with three new deals slated to price after the market close on Tuesday.

Dominion Energy plans to price $1.25 billion of $100-par series A equity units with price talk for a dividend of 7.25% to 7.75% and a threshold appreciation premium of 17.5% to 22.5%, according to a market source.

Goldman Sachs & Co. LLC, Barclays, BNP Paribas Securities Corp. and Wells Fargo Securities LLC are active bookrunners for the registered offering, which carries a greenshoe of $187.5 million.

Vonage Holdings plans to price $300 million of five-year convertible notes with price talk for a coupon of 1.5% to 2% and an initial conversion premium of 40% to 45%, according to a market source.

J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are bookrunners for the Rule 144A offering, which carries a greenshoe of $45 million.

Zynga plans to price $600 million of five-year convertible notes with price talk for a coupon of 0.25% to 0.75% and an initial conversion premium of 30% to 35%, according to a market source.

Morgan Stanle is lead left bookrunner for the Rule 144A offering, which carries a greenshoe of $90 million.

Coupa improves

Coupa’s newly priced 0.125% convertible notes due 2025 continued to post gains on an outright and dollar-neutral basis during its second day in the secondary space.

The 0.125% convertible notes were changing hands just north of 106 early in the session but came in alongside stock as the session progressed, sources said.

The notes were changing hands around 105.375 in the mid-afternoon.

They were up another 0.25 point dollar-neutral, a market source said.

The notes remained the most actively traded in the secondary space with about $21 million in reported volume by the mid-afternoon.

Coupa stock traded as high as $129.40 before closing the day at $123.78, an increase of 2.18%.

Despite tight pricing, which saw the notes model out to fair value, Coupa’s 0.125% notes skyrocketed on their market debut on Friday.

The notes closed Friday around 103 and were expanded 2 points to 2.25 points dollar-neutral, sources said.

China-based notes in focus

China-based online entertainment companies were among the volume movers on Monday as their equity improved amid optimism over trade talks.

iQIYI’s recently priced 2% convertible notes due 2025 were trading up from their lows as equity improved.

The notes were up about 2.25 points outright to change hands around 93.5, according to a market source.

Almost $19 million of the bonds were on the tape heading into the market close.

iQIYI’s 3.75% convertible notes due 2023 were also active with the notes up 1 point outright.

They were changing hands at 104.25 heading into the market close. About $6 million of the bonds changed hands during Monday’s session.

The Beijing-based online entertainment service provider’s ADSs traded as high as $18.53 before closing the day at $18.19, an increase of 1.73%.

Bilibili’s 1.375% convertible notes due 2026 were also active and trading up from their lows.

The 1.375% convertible notes rose almost 2 points outright to change hands at 90.75, a market source said.

The bonds saw about $9 million in reported volume heading into the market close.

The Shanghai-based online entertainment company’s ADSs closed Monday at $15.06, an increase of 1.76%.

Bilibili’s 1.375% convertible notes due 2026 and iQIYI’s 2% convertible notes due 2025 were part of a wave of China-based companies to price convertible notes in late March and early April.

Both issues took a hit in mid-May as their underlying equity traded down amid renewed trade tensions between the United States and China.

DexCom jumps

DexCom’s convertible notes were again active and trading up in the secondary space as stock jumped following news the glucose monitoring systems manufacturer had entered into a new collaboration.

DexCom’s 0.75% convertible notes due 2022 rose more than 10 points outright.

They were changing hands around 150.5 versus an equity price of $140.40 in the mid-afternoon, according to a market source.

About $10 million of the bonds were on the tape during Monday’s session.

DexCom’s 0.75% convertible notes due 2023 gained about 5 points outright to close the day just shy of 107, according to a market source.

DexCom stock was one of the major gainers of Monday’s session.

Stock traded as high as $141.28 before closing the day at $138.44, an increase of 9.89%.

Stock jumped on news the glucose monitoring systems manufacturer would collaborate with Companion Medical to share glucose monitoring data.

Mentioned in this article:

Bilibili Inc. Nasdaq: BILI

Coupa Software Inc. Nasdaq: COUP

DexCom Inc. Nasdaq: DXCM

Dominion Energy Inc. NYSE: D

iQIYI Inc. Nasdaq: IQ

Vonage Holdings Corp. NYSE: VG

Zynga Inc. Nasdaq: ZNGA

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