Morning Commentary: Sea, BeautyHealth, BigCommerce convertibles price, trade up

By Abigail W. Adams

Portland, Me., Sept. 10 – New paper was in focus in the convertibles secondary space on Friday after $3.45 billion hit the aftermarket.

Sea Ltd. priced $2.5 billion of five-year convertible notes, Beauty Health Co. (BeautyHealth) priced an upsized $650 million of five-year convertible notes and BigCommerce Holdings Inc. sold $300 million of five-year convertible notes after the market close on Thursday.

The new paper was in demand during bookbuilding and in the secondary space with all deals trading up on debut.

Sea expands

Sea priced $2.5 billion of five-year convertible notes after the market close on Thursday at par with a coupon of 0.25% and an initial conversion premium of 50%.

Pricing came at the midpoint of price talk for a coupon of 0% to 0.5% and at the cheap end of talk for an initial conversion premium of 50% to 55%, according to a market source.

Concurrently, the company priced 11 million American Depositary Shares at a price of $318 per share.

The new paper was in focus in the secondary space and performing “very well,” a source said.

The 0.25% notes traded up to 103 on an outright basis.

They expanded about 2 points dollar-neutral.

Sea’s ADS were changing hands at $329.85, an increase of 2.25%, shortly before 11 a.m. ET.

BeautyHealth in demand

In a deal that came with a large upsize and priced through coupon range, BeautyHealth priced $650 million of five-year convertible notes to yield 1.25% with an initial conversion premium of 32.5%.

Pricing came richer than initial talk for a coupon of 1.5% to 2% and at the rich end of talk for an initial conversion premium of 27.5% to 32.5%, according to a market source.

The greenshoe was also upsized to $100 million.

The initial size of the offering was $400 million with a greenshoe of $60 million.

The new paper skyrocketed in the secondary space. It traded up to 106 on an outright basis with stock up about 4%.

The notes were up about 3 points dollar-neutral, a source said.

BeautyHealth’s stock was changing hands at $25.20, an increase of 5.13%, shortly before 11 a.m. ET.

BigCommerce gains

BigCommerce priced $300 million of five-year convertible notes after the market close on Thursday at par with a coupon of 0.25% and an initial conversion premium of 37.5%, according to a company news release.

Pricing came at the midpoint of talk for a coupon of 0% to 0.5% and at the rich end of talk for an initial conversion premium of 32.5% to 37.5%, according to a market source.

The new paper was changing hands at 102.75 early in Friday’s session.

They were up about 1.25 points on hedge, a source said.

BigCommerce’s stock was changing hands at $54.15, an increase of 1.85%, shortly before 11 a.m. ET.

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