Shift4, NextEra on tap; cannabis convertibles get lifted; Bill.com gains outright

By Abigail W. Adams

Portland, Me., Nov. 30 – The convertibles primary market jumped into action on Monday with two new offerings on deck.

NextEra Energy Partners, LP plans to price $600 million of five-year convertible notes after the market close on Monday, and Shift4 Payments Inc. plans to price $400 million of five-year convertible notes after the market close on Wednesday.

The secondary space also saw a relatively active start to the week with $85 million in reported volume about one hour into the session and $622 million in reported volume at the market close.

The convertible notes of cannabis companies were in focus with several outstanding issues lifted alongside their equity.

Aurora Cannabis Inc.’s 5.5% convertible notes due 2024, Tilray Inc.’s 5% convertible notes due 2023, and Aphria Inc.’s 5.25% convertible notes due 2024 were active during Monday’s session.

Bill.com Holdings Inc.’s newly priced 0% convertible notes due 2025 continued to top the volume charts with the notes continuing to gain.

The calendar

NextEra Energy Partners plans to price $600 million of five-year convertible notes after the market close on Monday with price talk for a fixed coupon of 0%, a fixed initial conversion premium of 20% and a reoffer price of 99 to 99.5, according to a market source.

Goldman Sachs & Co. LLC is the bookrunner for the Rule 144A offering, which does not carry a greenshoe.

Proceeds will be used, in part, to redeem a portion of its 4.25% convertible notes due 2024.

Shift4 Payments plans to price $400 million of five-year convertible notes after the market close on Wednesday with price talk for a coupon of 0.25% to 0.75% and an initial conversion premium of 37.5% to 42.5%, according to a market source.

Goldman Sachs & Co. LLC, Credit Suisse Securities (USA) LLC, and Citigroup Global Markets Inc. are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $60 million.

Cannabis convertibles lifted

The convertible notes of cannabis companies were in focus on Monday with several making large gains alongside their equity.

Aurora Cannabis’ long-busted 5.5% convertible notes due 2024 gained 2 points in active trading.

The notes closed Monday at 72.25.

More than $20 million of the bonds were on the tape during Monday’s session.

Aurora’s stock traded to a high of $12.50 and a low of $10.01 before closing the day at $11.68, an increase of 11.56%.

Tilray’s 5% convertible notes due 2023 jumped 5.5 points to 63.5 on Monday.

There was more than $12.5 million in reported volume during Monday’s session.

Tilray’s stock traded to a high of $9.59 and a low of $8.08 before closing the day at $9.04, an increase of 6.35%.

Tilray recently converted $197.2 million of the 5% convertible notes for 17.3 million shares, leaving $277.9 million of the convertible notes outstanding, Prospect News reported.

Aphria’s 5.25% convertible notes surged more than 12 points, topping par for the first time since pricing in April 2019.

The 5.25% convertible notes rose to a 110-handle in active trading, closing the day at 110.5.

There was about $10 million in reported volume.

Aphria’s stock traded to a high of $8.68 and a low of $7.85 before closing the day at $8.38, an increase of 8.41%.

Aphria announced on Monday that it had closed its acquisition of craft beer company SweetWater Brewing Co. LLC for $250 million in cash and $50 million in stock.

The equity of companies in the cannabis sector have been on a tear since the November election with several states passing legalization initiatives, including New Jersey.

Bill.com gains continue

Bill.com’s 0% convertible notes due 2025 remained in focus on Monday with the notes continuing their upward momentum.

The notes gained 1.625 points outright with stock up 3%.

The notes were changing hands at 106.375 early in the session and closed the day at 107.

“They did well,” a source said.

There was $23 million in reported volume during Monday’s session.

Bill.com’s stock traded to a high of $123.49 and a low of $116.32 before closing the day at $122.71, an increase of 3.13%.

Underwriters recently fully exercised the greenshoe, lifting the total size of the deal to $1.15 billion, Prospect News reported.

Mentioned in this article:

Aphria Inc. Nasdaq: APHA

Aurora Cannabis Inc. NYSE: ACB

Bill.com Holdings Inc. NYSE: BILL

NextEra Energy Partners, LP NYSE: NEP

Shift4 Payments Inc. NYSE: FOUR

Tilray Inc. Nasdaq: TLRY

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