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Vertex Energy convertible notes on deck; DraftKings, Inotiv strengthen; FuboTV active
By Abigail W. Adams
Portland, Me., Oct. 26 – After almost three weeks of no new deal activity, the convertibles primary market has one small offering on deck.
Vertex Energy Inc. plans to price $155 million of six-year convertible notes after the market close on Tuesday.
However, the offering was wall-crossed and already spoken for, a source said.
Meanwhile, activity in the secondary space remained muted on a volatile day for equities.
While equity markets launched the day strong, a mid-session sell-off that hit tech and growth stocks particularly hard, erased the market’s early gains.
Equities rebounded after the steep sell-off. However, selling pressure took hold heading into the close with equities ending the day mixed.
The Dow Jones industrial average closed the day up 16 points, or 0.04%, the S&P 500 index closed up 0.18%, the Nasdaq Composite closed up 0.06% and the Russell 2000 index finished the day down 0.66%.
There was $70.5 million in reported volume a little over one hour into the session and $400 million on the tape heading into the market close.
While trading volume remained light, buyers were active in the space with several bids-wanted-in-competition lists circulating the market.
With the recent dearth of new paper, market players were scouring the secondary looking for opportunities to put their money to work.
DraftKings Inc.’s 0% convertible notes due 2028 were in focus with the notes gaining on an outright and dollar-neutral basis after the sports betting operator scrapped a planned acquisition.
The news sparked activity in fuboTV’s 3.25% convertible notes due 2026 with speculation the sports broadcaster may be a potential acquisition target.
Inotiv Inc.’s 3.25% convertible notes due 2027 also saw some action with the notes jumping on an outright and dollar-neutral basis as stock surged.
Vertex on deck
Vertex Energy plans to price $155 million of six-year convertible notes after the market close on Tuesday with price talk for a discounted offer price of 90, a coupon of 6% to 6.5% and an initial conversion premium of 35% to 40%, according to a market source.
The offering was wall-crossed and already spoken for.
However, the attractive terms sparked interest from additional buyers with the deal oversubscribed, a source said.
DraftKings gains
DraftKings’ 0% convertible notes due 2028 saw renewed attention in the secondary space with the notes gaining on an outright and dollar-neutral basis as stock surged after the company announced it was scrapping a planned acquisition.
The 0% convertible notes rose about 2.375 points outright with stock up 7%.
The notes were changing hands at 89.625 versus a stock price of $50.07 early in the session.
They continued to trade on an 89-handle heading into the market close.
The notes expanded 0.75 point dollar-neutral, a source said.
DraftKings’ stock traded to a low of $48.39 and a high of $50.48 before closing the day at $48.75, an increase of 4.12%.
Stock surged after the sports betting operator announced it was dropping its bid for Entertain plc.
DraftKings’ takeover bid was valued at $22.4 billion, Bloomberg reported.
In addition to bolstering DraftKings’ stock price, the abandoned acquisition was credit positive, a source said.
fuboTV active
DraftKings’ scrapped acquisition of Entertain sparked activity in fuboTV’s 3.25% convertible notes due 2026 and stock amid speculation that the streaming service for live sports may be a future acquisition target.
fuboTV’s 3.25% convertible notes continued to trade around 96.
fuboTV’s stock traded to a high of $30.53 and a low of $28.86 before closing the day at $29.27, a decrease of 2.74%.
Inotiv gains
Inotiv’s 3.25% convertible notes due 2027 were making large gains on an outright and dollar-neutral basis as stock skyrocketed during Tuesday’s session.
The 3.25% convertible notes jumped more than 10 points outright with stock up 22%.
The notes were changing hands at 114.5 versus a stock price of $38.96 early in the session.
They rose to 120 by the late afternoon.
The notes expanded 1 point dollar-neutral.
Inotiv’s stock traded to a low of $37.87 and a high of $46.42 before closing the day at $46.15, an increase of 22.54%.
Mentioned in this article:
DraftKings Inc. Nasdaq: DKNG
fuboTV NYSE: FUBO
Inotiv Inc. Nasdaq: NOTV
Vertex Energy Inc. Nasdaq: VTNR
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