Morning Commentary: Progenity, Shift4 convertibles price; Shift4 skyrockets on debut

By Abigail W. Adams

Portland, Me., Dec. 3 – The convertibles primary market cleared the forward calendar with two deals pricing, bringing the weekly tally to $1.725 billion over four deals.

Shift4 Payments Inc. priced an upsized $600 million offering of five-year convertible notes and Progenity Inc. priced $75 million of five-year convertible notes after the market close on Wednesday.

The new paper from Shift4 was in focus in the secondary space and skyrocketed on debut.

Shift4 in demand

Shift4 Payments priced an upsized $600 million 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 45%.

Pricing came at the rich end of revised price talk for a coupon of 0% to 0.25% and an initial conversion premium of 42.5% to 45%, according to a market source.

Initial price talk was for a coupon of 0.25% to 0.75% and an initial conversion premium of 37.5% to 42.5%.

Concurrently with the convertible notes offering, certain stockholders sold 8 million shares in a public offering at a price of $55.50 a share.

The public offering carries a greenshoe of 1.2 million shares.

The new paper from Shift4 was in focus in the secondary space and skyrocketed on debut.

The 0% notes traded as high as 107 on an outright basis, a source said. They expanded as much as 3.6 points on a dollar-neutral, or hedged, basis.

There was more than $88 million on the tape about one hour into the session.

Shift4’s stock traded up to $59.75, an increase of 6.82%, shortly before 11 a.m. ET.

Progenity prices

Progenity priced $75 million of five-year convertible notes after the market close on Wednesday at the cheap end of talk with a coupon of 7.25% and an initial conversion premium of 10%.

Price talk was for a coupon of 6.75% to 7.25% and an initial conversion premium of 10% to 15%.

The company priced a concurrent secondary offering of 7,645,259 shares at a public offering price of $3.27.

The secondary offering carries a greenshoe of 1,146,788 shares.

The small offering was wall-crossed and was not active early in Thursday’s session.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.