Morning Commentary: New deals from Flexion, Neurocrine jump over par post-pricing

By Stephanie N. Rotondo

Seattle, April 27 – Newly priced convertible bonds from Flexion Therapeutics Inc. and Neurocrine Biosciences Inc. were dominating early trading on Thursday, according to one New York-based sellside source.

As of mid-morning, total trading volume was around $240 million, the source said. Of that amount, Flexion and Neurocrine made up “$180-odd million” of the activity.

Both deals – which priced late Wednesday – were doing well upon the break.

Flexion’s $175 million of 3.375% convertible senior notes due 2024 were seen at 103 bid, 103.5 offered in early dealings as the underlying stock (Nasdaq: FLXN) slid 1% to $20.40.

Neurocrine’s $450 million of 2.25% convertible senior notes due 2024 were meantime pegged at 103.375 bid, 104.75 offered. The company’s shares (Nasdaq: NBIX) were up 31 cents at $53.59.

The Flexion deal came upsized from $125 million and with an initial conversion premium of 30%. The yield came in the middle of the 3.125% to 3.625% price talk.

Wells Fargo Securities LLC, BMO Capital Markets and RBC Capital Markets were the bookrunners on the Rule 144A deal.

Neurocrine’s new issue came richer than the 2.5% to 3% yield talk. The initial conversion premium of 42.5% was also on the rich side of the 37.5% to 42.5% talk.

Barclays and Jefferies LLC were the joint bookrunners.

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