Travere Therapeutics convertibles jump on debut; MongoDB expands; Snap notes rebound

By Abigail W. Adams

Portland, Me., March 9 – The convertibles secondary space saw an uptick of activity on Wednesday as equity markets broke out of their rout and the first new deal of the week made its aftermarket debut.

Travere Therapeutics Inc. priced an upsized $275 million of seven-year convertible notes after the market close on Tuesday.

The new paper jumped on an outright and dollar-neutral basis on debut.

The new paper hit the secondary space on a strong day for the market as equities surged amid declining oil futures.

The Dow Jones industrial average closed the day up 654 points, or 2%, the S&P 500 index closed up 2.57%, the Nasdaq Composite closed up 3.59% and the Russell 2000 index closed up 2.71%.

While convertible bond trading activity was light early in the session, it picked up as the session progressed with $700 million in reported volume about an hour before the close.

“It’s a lift-a-thon,” a market source said.

MongoDB Inc.’s 0.25% convertible notes due 2026 jumped on an outright and dollar-neutral basis following better-than-expected earnings.

The notes had been volatile alongside stock heading into the report.

Snap Inc.’s 0.125% convertible notes due 2028 rebounded on an outright basis alongside stock.

While the market firmed on Wednesday, there was still plenty of pain in the space with credit spreads blowing out 100 basis points over the past week.

“Everyone got hurt, but the outrights especially,” a source said.

Travere up on debut

Travere Therapeutics priced an upsized $275 million of seven-year convertible notes after the market close on Tuesday at par with a coupon of 2.25% and an initial conversion premium of 35%.

Pricing came at the cheap end of talk for a coupon of 1.75% to 2.25% and at the midpoint of talk for an initial conversion premium of 32.5% and 37.5%.

The greenshoe was also upsized to $41.25 million. The initial size of the offering was $250 million with a greenshoe of $37.5 million.

The new paper was putting in a strong performance in the aftermarket.

The new paper traded to a low of 100.5 and a high of 103.75 within the first hour of trading, a source said.

However, the majority of prints were on a 101-handle.

The notes climbed as stock turned positive as the session progressed.

They were changing hands at 102.875 versus a stock price of $24.74 in the late afternoon.

The notes expanded 1.625 points on the bid side dollar-neutral, a source said. They were moving on a 70% delta.

“Nicely done deal,” a source said.

There was $34.5 million in reported volume.

Travere’s stock wavered between gains and losses before closing the day strong.

Stock traded to a low of $23.08 before closing the day at the session high of $25.12, an increase of 6.40%.

Proceeds from the new offering were being used to repurchase for cash $207.1 million of the biotech’s outstanding 2.5% convertible notes due 2025 in privately negotiated transactions.

The buyback price for the outstanding bonds appeared to be 102, a source said.

MongoDB gains

MongoDB’s 0.25% convertible notes due 2026 jumped on an outright and dollar-neutral basis as stock skyrocketed after earnings.

The 0.25% notes were up 22 points outright.

They were changing hands at 173 versus a stock price of $334.81 in the late afternoon.

The notes expanded 1.5 to 2 points dollar-neutral on the move up, a source said.

There was $15 million in reported volume.

MongoDB’s stock traded to a low of $315 and a high of $339.79 before closing the day at $334.09, an increase of 18.58%.

Stock soared after the database platform company smashed analyst expectations and provided upbeat guidance.

MongoDB reported losses per share of 9 cents versus analyst expectations for losses per share of 22 cents.

Revenue was $266.5 million versus analyst expectations for revenue of $243.4 million.

MongoDB’s 0.25% convertible notes have been volatile alongside stock leading into earnings.

Including Wednesday’s surge, stock is still down about 12% since last week.

The 0.25% convertible notes were trading above double par in mid-February prior to the downturn in equities.

The notes were changing hands at 151 on Tuesday, their lowest level since May 2021.

Snap rebounds

Snap’s 0.125% convertible notes due 2028 regained some losses as stock rebounded strongly alongside the broader market on Wednesday.

The 0.125% notes rose 4 points outright.

They were changing hands at 97.75 versus a stock price of $34.20 in the late afternoon, according to a market source.

There was $20 million in reported volume.

Snap’s stock traded to a low of $31.78 and a high of $34.23 before closing the day at $33.67, an increase of 7.85%.

The 0.125% notes sank below par last week and hit their lowest level of 92.625 since pricing on Monday.

Snap’s 0.125% convertible notes were the largest deal of the year. The company priced the $1.5 billion issue on Feb. 9.

Mentioned in this article:

MongoDB Inc. Nasdaq: MDB

Snap Inc. NYSE: SNAP

Travere Therapeutics Inc. Nasdaq: TVTX

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