Senseonics prices; Oil States strong on debut; First Majestic up; Intel bounces back

By Abigail W. Adams

Portland, Me., Jan. 26 – Friday began with a new deal pricing, rounding out a week that has seen $975 million of new paper enter the convertibles space.

In a small overnight deal, Senseonics Holdings Inc. priced $50 million of five-year convertible notes prior to the market open on Friday with a coupon of 5.25% and an initial conversion premium of 6.3%.

Oil States International, Inc.’s recently priced 1.5% convertible notes due 2023 were strong on their debut, trading north of 103 early in the session, a market source said.

The company priced $200 million of five-year senior convertible notes after the market close on Thursday with a coupon of 1.5% and an initial conversion premium of 37.5%.

First Majestic Silver Corp.’s recently priced 1.875% notes due 2023 were gaining strength on Friday after its stock took a hit on Thursday, the day the new notes debuted.

While the outright price was below par, the notes were still up about 1 point on a dollar-neutral basis, the source said.

Intel Corp.’s 3.25% convertible notes due 2039 gained 15 points on an outright basis during Friday’s session with the company stock up more than 10% after fourth-quarter earnings beat analysts’ expectations.

The convertible notes sunk during the first half of January as the Intel stock declined after news broke about security vulnerabilities in Intel’s processing systems.

Senseonics converts

The day began with Senseonics pricing its first convertibles issuance of $50 million of five-year notes with a coupon of 5.25% and an initial conversion premium of 6.3%.

BTIG, LLC is the bookrunner for the registered deal, which carries a greenshoe of $7.5 million.

The Germantown, Md.-based medical technology company, which is focused on glucose monitoring products for diabetes, went public in 2016.

The small-cap company is raising capital to support the commercialization of its flagship product, Eversense, in the United States.

The company released preliminary fourth-quarter and year-end reports on Thursday, as it announced its convertible note offering. While the year-over-year revenue growth was significant, it fell short of analysts’ expectations.

Senseonics stock tanked on Friday, ending the session at $2.84, a decrease of 11.25%.

People like Oil States

Oil States’ 1.5% convertible notes due 2023 hit the market on Friday after pricing Thursday night.

The $200 million deal came at the rich end of talk, which had been set at a coupon of 1.5% to 2% and an initial conversion premium of 32.5% to 37.5%.

While some market sources did not find the deal attractive due to the credit spread, “people like that one,” a market source said.

Oil States’ 1.5% notes were trading north of 103 early in the session with the stock up 1.68%.

Oil States stock slipped in above-average-volume trading, closing Friday at $32.60, a decrease of 0.15%.

While the new convertible notes were well received on their debut, Oil States’ recent acquisition of GEODynamics, Inc. made “the credit spread too tight,” the source said.

Proceeds from the convertibles deal will be used to pay down debt under the company’s revolving credit facility, which was drawn to fund the acquisition of GEODynamics, Inc., which closed on Jan. 12.

First Majestic active

First Majestic’s stock took a beating soon after its newly priced 1.875% notes due 2023 made their market debut Thursday. While the notes, which were at 100.5 shortly after their debut, weakened later in the afternoon, they were gaining strength on Friday, a market source said.

The notes were trading at 99.25 early in Friday’s session with the stock up 0.84%. While the outright price was below par, the notes were still up about 1 point on a dollar-neutral basis, the source said.

“I see pretty good demand both in the U.S. and in Canada,” the source said about the Rule 144A and Regulations S deal, with both outright and hedge players involved.

First Majestic stock tumbled along with many metal and mining companies on Thursday after president Donald Trump endorsed a strong-dollar policy. First Majestic stock closed Friday at $6.50, a decrease of 0.15%.

Intel rebounds

Intel’s 3.25% convertible notes were up more than 15 points during Friday’s session after the semiconductor company beat analyst expectations in its fourth-quarter earnings report.

The 3.25% notes traded to a high of 238.925 and a low of 228 before ending Friday’s session at 235, according to Trace volume.

Intel’s stock ended the day at $50.08, an increase of 10.55%.

The 3.25% convertible notes move at an almost 100% delta, a market source said. The notes were trading below 210 for the first half of January after news broke about the security vulnerabilities in Intel’s processing systems.

The notes have slowly climbed over the last two weeks, but spiked on Friday. Intel announced fourth-quarter earnings of $17.05 billion on Thursday, outpacing analysts’ expectations for $16.35 billion.

Mentioned in this article:

First Majestic Silver Corp. NYSE: AG

Intel Corp. Nasdaq: INTC

Oil States International, Inc. NYSE: OIS

Senseonics Holdings Inc. AMEX: SENS

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