Boston Scientific, Under Armour, Five9 expand on debut; Penn Gaming skyrockets

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 deals brought the weekly tally to $5.84 billion, which priced over 11 deals.

The primary market is expected to remain active in the truncated post-Memorial Day week, sources said.

The new paper dominated activity in the secondary space with Under Armour and Five9 accounting for almost 25% of the $650 million in reported volume for convertible bonds that were on the tape about one hour before the market close.

While Under Armour’s notes sank below par, they were expanded dollar-neutral.

New paper from Boston Scientific and Five9 were up on both an outright and dollar-neutral basis.

Meanwhile, Penn National Gaming Inc.’s 2.75% convertible notes due 2026 continued to stage an impressive rebound with the notes skyrocketing on an outright and dollar-neutral basis over the past week.

Cryoport Inc.’s 3% convertible notes due 2025 also continued to gain on an outright basis on Friday.

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%.

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 shares, secondary offering of common stock at $34.25 a share.

The mandatory convertible preferred stock soared in secondary market activity.

The stock was up 5.5 points on an outright basis early in the session. It continued to trade between $105 to $105.25 in the late afternoon.

The mandatory convertible preferred stock expanded about 0.75 point dollar-neutral, a market source said.

Boston Scientific stock traded to a high of $36.32 and a low of $35.27 before closing the day at $35.91, an increase of 3.13%.

Five9 expands

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.

However, they continued to gain strength as the trading day progressed.

The 0.5% notes traded up to 103.75 in the midafternoon.

They were expanded about 1 point dollar-neutral, a market source said.

The notes dominated activity in the secondary space and had $108 million in reported volume about one hour before the market close.

Five9 stock traded to a high of $106.52 and a low of $102.81 before closing the day at $104.71, an increase of 1.33%.

In connection with the offering, the company repurchased or exchanged $181 million of the principal amount of its outstanding 0.125% convertible notes due 2023 for $181 million in cash and 2,723,582 shares.

Prior to the exchange, the 0.125% notes had $258.75 million outstanding, according to Trace data.

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 notes dropped below par with stock off during Friday’s session. However, they were expanding dollar-neutral.

The notes were changing hands at 99.625 early in the session and dropped down to 99 by the midafternoon.

The notes expanded about 0.75 point dollar-neutral, a source said.

There was about $87 million in reported volume by the late afternoon.

Under Armour stock traded to a high of $7.70 and a low of $7.32 before closing the day at $7.38, a decrease of 4.16%.

Penn Gaming rebounds

Penn Gaming’s 2.75% convertible notes due 2026 skyrocketed over the past week on an outright and dollar-neutral basis.

The 2.75% notes were changing hands at 141.375 Friday afternoon. The notes closed out last Friday at 103.5.

They expanded about 1 point dollar-neutral from the previous session.

After initially struggling in the aftermarket, the 2.75% notes were up about 9.5 points dollar-neutral since pricing on May 11.

Penn Gaming stock traded to a high of $30.47 and a low of $28.11 before closing the day at $30.38, an increase of 2.46%.

Penn Gaming stock surged alongside the broader gaming sector over the past week as casinos prepare to resume operations.

Cryoport day 2

Cryoport’s 3% convertible notes due 2025 continued to gain in active trading their second day in the secondary space.

The 3% notes were up another 5 points outright to trade as high as 109.875 in the late afternoon.

The small issue remained active with more than $12 million on the tape.

Cryoport’s stock traded to a high of $22.79 and a low of $20.86 before closing the day at $22.73, an increase of 6.12%.

Mentioned in this article:

Boston Scientific Corp. NYSE: BSX

Five9 Inc. Nasdaq: FIVN

Penn National Gaming Inc. Nasdaq: PENN

Under Armour Inc. NYSE: UA

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.