Cypress drops outright, expands dollar-neutral; BridgeBio weakens; NanoString gains

By Abigail W. Adams

Portland, Me., March 6 – After holding up relatively well throughout the volatility that whipsawed markets the past two weeks, the convertibles secondary space was starting to crack on Friday.

The market was significantly weaker with convertible issuers that also have straight debt leading the market lower, a market source said.

BridgeBio Pharma Inc.’s newly priced 2.5% convertible notes due 2027 were weaker their second day in the market. While down slightly on a dollar-neutral basis, the notes held onto their dollar-neutral expansion.

NanoString Technologies Inc.’s newly priced 2.625% convertible notes due 2025 continued to gain on an outright basis although the notes were moving largely in line dollar-neutral.

Cypress Semiconductor Corp.’s convertible notes were active as Infineon Technologies AG’s takeover bid for the company was challenged.

While the notes were down outright, they were expanding dollar-neutral.

BridgeBio weaker

BridgeBio’s newly priced 2.5% convertible notes due 2027 were weaker the second day in the market as stock continued to trade off.

The notes dropped about 2 points outright and were trading below par heading into the market close.

They closed the day at 99.25.

The notes came in about 0.25 to 0.375 point dollar-neutral, a market source said.

However, the notes were still expanded about 3 points from pricing, the source said.

BridgeBio stock traded to a low of $28.02 and a high of $30.23 before closing the day at $28.92, a decrease of 3.57%.

The 2.5% notes traded as high as 103.5 on their secondary market debut on Thursday and closed the day with about a 3.5 point dollar-neutral expansion.

NanoString trades up

NanoString Technologies’ 2.625% convertible notes due 2025 continued to gain on an outright basis their second day in the secondary space.

After trading up to a 103 handle on their secondary market debut on Thursday, the 2.625% convertible notes climbed another 2 points.

The notes traded as high as 105.875 and closed the day at 105.25, a market source said.

They were moving largely in line dollar-neutral.

NanoString stock traded to a low of $33.27 and a high of $36.43 before closing the day at $36.04, an increase of 4.62%.

Cypress’ merger

Cypress’ convertible notes were active and moving down outright but trading up on swap as its stock cracked following regulatory challenges to Infineon’s takeover of the company.

Cypress’ 4.5% convertible notes due 2022 sank almost 20 points outright to close the day at 135, a market source said.

The bonds saw more than $17 million in reported volume.

The notes were also down almost 20 points on Thursday.

They were changing hands on a 170 handle heading into Thursday’s session, according to Trace data.

Cypress’ 2% convertible notes due 2023 dropped more than 7 points outright to 106.25.

The bonds saw more than $22 million in reported volume.

The 2% notes were trading in the 120s heading into Thursday’s session.

While the bonds were down outright, they were opening up dollar-neutral, a market source said.

Cypress stock traded to a low of $15.92 and a high of $17.76 before closing the day at $16.37, a decrease of 14.65%.

Stock was also down 17% on Thursday as regulatory opposition to Infineon’s takeover mounted.

The Committee on Foreign Investment in the U.S. has cited a potential security risk involved in the takeover and national security officials have recommended president Donald Trump block the transaction, Bloomberg reported.

Infineon is a German semiconductor company that derives about one-third of its revenue from China.

Cypress is a San Jose, Calif.-based semiconductor company with contracts with the defense department.

Infineon announced in June 2019 its planned acquisition of Cypress at $23.85 a share for a total enterprise value of €9 billion.

The deal was expected to close in early 2020 subject to regulatory approval.

Mentioned in this article:

BridgeBio Pharma Inc. Nasdaq: BBIO

Cypress Semiconductor Corp. Nasdaq: CY

NanoString Technologies Inc. Nasdaq: NSTG

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