Akamai, Workiva on tap; Insight Enterprises eyed; Snap active; Alteryx notes improve

By Abigail W. Adams

Portland, Me., Aug. 12 – After setting the year-to-date record for highest volume week for new deal activity during the Aug. 5 week, the convertibles primary market already stood poised to break it.

Four deals totaling $3.1 billion launched on Monday despite a down day for equities.

Akamai Technologies Inc. plans to price $1 billion of eight-year convertible notes, Southern Co. plans to price $1.5 billion, or 30 million par of $50 series A equity units, and Workiva Inc. plans to sell $300 million of seven-year convertible notes after the market close on Tuesday.

In an overnight deal, Insight Enterprises Inc. plans to price $300 million of 5.5-year convertible notes after the market close on Monday.

The deal was heard to be in demand with books closing in the early afternoon.

Meanwhile, the convertible secondary space saw decent trading volume early in the session for a summer Monday, a market source said.

However, activity slowed as equities continued their downward trajectory into the afternoon with markets bracing for the future direction of trade relations between Washington and Beijing.

There was about $51 million in reported volume early in the session and $182 million in reported volume heading into the afternoon.

Recent deals remained in focus with Snap Inc.’s new 0.75% convertible notes due 2026 again a major volume mover.

Alteryx Inc.’s two tranches of convertible notes were also active with the notes continuing to improve.

Outside of the new paper, AMAG Pharmaceuticals Inc.’s 3.25% convertible notes due 2022 were quoted significantly higher as stock soared on an otherwise down day for equities.

New deals

The forward calendar again ballooned on Monday with one deal launching prior to the market open and three more joining the forward calendar after the market close.

Akamai Technologies plans to price $1 billion of eight-year convertible notes after the market close on Tuesday with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 30% to 35%, according to a market source.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and BofA Securities Inc. are the bookrunners for the Rule 144A offering, which carries a greenshoe of $150 million.

Southern Co. plans to price $1.5 billion, or 30 million par of $50 series A equity units, after the market close on Tuesday with price talk for a dividend of 6.625% to 7.125% and a threshold appreciation premium of 17.5% to 22.5%, according to a market source.

Goldman Sachs & Co. LLC, Barclays, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, BNP Paribas Securities Corp., BofA Securities, JPMorgan, Scotia Howard Weil, and Wells Fargo Securities LLC are the bookrunners for the registered offering, which carries a greenshoe of $225 million, or 4.5 million equity units.

Workiva plans to sell $300 million of seven-year convertible notes after the market close on Tuesday with price talk for a coupon of 0.875% to 1.375% and an initial conversion premium of 37.5% to 42.5%, according to a market source.

Goldman Sachs and SunTrust Robinson Humphrey Inc. are active bookrunners for the Rule 144A offering, which carries a greenshoe of $45 million.

Stifel, Nicolaus & Co. Inc. is a passive bookrunner.

Insight eyed

Insight Enterprises plans to sell $300 million of 5.5-year convertible notes after the market close on Monday with price talk for a coupon of 0.75% to 1.25% and an initial conversion premium of 30% to 35%, according to a market source.

Sources pegged assumptions at 300 basis points over Libor and a 30% vol., which modeled about 0.75 point cheap at the midpoint of talk.

Despite the deluge of new paper in the previous week, Insight Enterprises’ new offering was heard to be in demand with books closing in the early afternoon, sources said.

The global technology company was well liked in the tech space, a source said.

The company has an active merger & acquisition pipeline and most recently acquired direct marketing company PCM Inc. in late June.

Snap in focus

Snap’s new 0.75% convertible notes due 2026 were again major volume movers during Monday’s session.

The 0.75% convertible notes traded down outright as stock dropped amid general weakness in the market.

The notes were down 1.5 points outright to 105.25 early in the session. However, they traded up to just shy of 106 in the late afternoon as stock pared its losses.

The bonds saw about $20 million of reported volume heading into the market close.

The activity was no surprise given the size of the issue, a market source said.

The greenshoe on the notes was recently exercised in full lifting the size of the deal to $1.27 billion.

Snap stock closed Monday at $16.82, a decrease of 0.94%.

Alteryx gains continue

Alteryx’s two tranches of convertible notes continued to improve on both an outright and dollar-neutral basis in active trading on Monday.

Alteryx’s 0.5% convertible notes due 2024 were changing hands at 102.75 early in the session.

The 1% convertible notes due 2026 were changing hands at 102.5.

Both tranches climbed to north of 103 in the mid-afternoon.

They were both expanded about 0.25 point dollar-neutral, a market source said.

Alteryx stock traded as high as $132.62 during Monday’s session but closed the day at $131.30, an increase of 0.16%.

The greenshoe on the notes was also recently exercised in full, lifting the total size of the deal to $800 million.

AMAG jumps

While volume was light, AMAG Pharmaceuticals’ 3.25% convertible notes due 2022 jumped on an outright basis as stock soared on an otherwise down day for the market.

The 3.25% convertible notes were quoted up to 81 bid, 83 offered on Monday with stock up almost 17% in intraday trading.

The notes were on a 76 handle after the company reported earnings late last week.

AMAG stock traded as high as $12.24 before closing the day at $11.83, an increase of 14.19%.

The cause for the sudden rise in stock was unclear. It may have been the result of a short squeeze, a market source said.

Mentioned in this article:

Akamai Technologies Inc. Nasdaq: AKAM

Alteryx Inc. NYSE: AYX

AMAG Pharmaceuticals Inc. Nasdaq: AMAG

Insight Enterprises Inc. Nasdaq: NSIT

Snap Inc. NYSE: SNAP

Southern Co. NYSE: SO

Workiva Inc. NYSE: WK

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