Morning Commentary: Boston Scientific, Under Armour, Five9 make their aftermarket debuts

By Abigail W. Adams

Portland, Me., May 22 – The convertible primary market rounded out another blockbuster week with three deals totaling $1.965 billion pricing.

Boston Scientific Corp. priced an upsized $875 million of $100-par three-year series A mandatory convertible preferred stock, Under Armour Inc. priced an upsized $440 million of four-year convertible notes, and Five9 Inc. priced $650 million of five-year convertible notes after the market close on Thursday.

The new paper dominated activity in the secondary space although with mixed results.

New paper from Under Armour sank below par with stock off early in the session.

However, Boston Scientific and Five9 jumped on an outright basis.

Boston Scientific soars

Boston Scientific priced an upsized $875 million of $100-par three-year series A mandatory convertible preferred stock after the market close on Thursday with a dividend of 5.5% and a threshold appreciation premium of 22.5%, according to an FWP filing with the Securities and Exchange Commission.

Pricing came at the midpoint of talk for a dividend of 5.25% to 5.75% and at the rich end of talk for a threshold appreciation premium of 17.5% to 22.5%, according to a market source.

Concurrently, the company priced an upsized $850 million, or 25.55 million share, secondary offering of common stock at $34.25 a share.

The preferred stock soared in secondary market activity.

The preferred stock was up 5.5 points on an outright basis early in the session.

Boston Scientific stock traded up to $36.01, an increase of 3.45%, shortly before 11 a.m. ET.

Five9 jumps

Five9 priced $650 million of five-year convertible notes after the market close on Thursday at par with a coupon of 0.5% and an initial conversion premium of 30%.

Pricing came towards the cheap end of talk for a coupon of 0.125% to 0.625% and at the cheap end of talk for an initial conversion premium of 30% to 35%, according to a market source.

The 0.5% notes were changing hands at 101.5 about one hour into the session, according to a market source.

There was $27 million in reported volume about one hour into the session.

Five9 stock traded as high as $105.42 early in the session but came in to trade at $103.76, an increase of 0.41%, shortly before 11 a.m. ET.

Under Armour below par

Under Armour priced an upsized $440 million of four-year convertible notes after the market close on Thursday at par with a coupon of 1.5% and an initial conversion premium of 27.5%.

Pricing came at the midpoint of talk for a coupon of 1.25% to 1.75% and at the cheap end of talk for an initial conversion premium of 27.5% to 32.5%, according to a market source.

The new 1.5% notes dominated activity in the secondary space.

However, the notes were trading below par with stock off early in the session.

The notes were changing hands at 99.625 with stock off about 2% early Friday. Under Armour stock traded down to $7.41, a decrease of 3.9%, shortly before 11 a.m. ET.

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