Inotiv notes on tap; Bill.com skyrockets; RBC Bearings up outright, down dollar-neutral

By Abigail W. Adams

Portland, Me., Sept. 22 – New convertibles paper was in focus on Wednesday with $900 million in new supply entering the secondary space and one more offering set to price after the market close.

Inotiv Inc. plans to price $110 million of six-year convertible notes after the market close on Wednesday. The deal looked cheap based on underwriters’ assumptions.

Bill.com Holdings Inc. priced $500 million of six-year convertible notes and RBC Bearings Inc. priced $400 million par-of-$100 three-year mandatory convertible preferred stock after the market close on Tuesday.

The new paper was putting in mixed performances in the secondary space on a strong day for equities.

Equity benchmarks jumped after Federal Reserve chairman Jerome Powell announced that bond tapering could be announced at the November meeting and continued to stress patience in regards to interest rate hikes.

The Dow Jones industrial average closed the day up 338 points, or 1%, the S&P 500 index closed the day up 0.95%, the Nasdaq Composite closed the day up 1.02% and the Russell 2000 index closed the day up 1.51%.

New notes from Bill.com and RBC Bearings were both making gains on an outright basis.

However, Bill.com’s convertible notes saw a large dollar-neutral expansion while RBC Bearings’ mandatory convertible preferreds contracted dollar-neutral.

Inotiv looks cheap

Inotiv plans to price $110 million of six-year convertible notes after the market close on Wednesday with price talk for a coupon of 3% to 3.5% and an initial conversion premium of 30% to 35%, according to a market source.

The deal was heard to be in the market with assumptions of 800 basis points over Libor and a 38% vol., according to a market source.

Using those assumptions, the deal looked 2.61 points cheap at the midpoint of talk.

Bill.com in demand

Bill.com priced $500 million of six-year convertible notes after the market close on Tuesday at par with a coupon of 0% and an initial conversion premium of 52.5%.

Pricing came in line with revised talk for a fixed coupon of 0% and at the cheap end of revised talk for an initial conversion premium of 52.5% to 55%, according to a market source.

Talk tightened from initial price talk for a coupon of 0% to 0.25% and an initial conversion premium of 45% to 50%.

Concurrently, the company sold an upsized $1.2 billion, or 4,411,765 shares, of common stock at a public offering price of $272 per share in a registered offering.

The secondary offering carries a greenshoe of 661,764 shares, or $180 million. The initial size of the secondary offering was $1 billion with a greenshoe of $150 million.

The strong demand seen during bookbuilding followed the notes into the secondary space.

The notes were changing hands at 104 on an outright basis and expanding dollar-neutral early in the session, a source said.

While the notes came in on an outright basis as stock gave back some gains, the notes maintained a large dollar-neutral expansion.

The notes were changing hands at 103.5 in the late afternoon.

However, they were expanded about 4 points dollar-neutral, a source said.

Bill.com’s stock traded to a high of $279.50 and a low of $267.26 before closing the day at $274.32, an increase of 0.066%.

RBC Bearings contracts

RBC Bearings priced $400 million par-of-$100 three-year mandatory convertible preferred stock after the market close on Tuesday at par with a dividend of 5% and a threshold appreciation premium of 22.5%.

Pricing came at the rich end of talk for a dividend of 5% to 5.5% and at the midpoint of talk for a threshold appreciation premium of 20% to 25%, according to a market source.

Concurrently, the company priced a secondary offering of 3 million shares of common stock at a public offering price of $185. The secondary offering carries a greenshoe of 450,000 shares.

The mandatory convertible preferreds were putting in a strong performance on an outright basis.

However, they were contracted dollar-neutral.

The 5% mandatory convertible preferreds were changing hands at 102.75 early in the session.

They rose to 105 in the late afternoon.

However, the notes were contracted 0.25 to 0.5 point dollar-neutral, a source said.

RBC Bearings’ common stock traded to a high of $203.94 and a low of $193.30 before closing the day at $199.57, an increase of 5.43%.

Mentioned in this article:

Bill.com Holdings Inc. NYSE: BILL

Inotiv Inc. Nasdaq: NOTV

RBC Bearings Inc. Nasdaq: ROLL

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