John Bean convertibles on tap; Shift Technologies skyrockets in aftermarket; Ford active

By Abigail W. Adams

Portland, Me., May 25 – The convertibles primary market remained active on Tuesday with one deal launching before the market open.

John Bean Technologies Corp. plans to price $350 million of five-year convertible notes after the market close on Tuesday.

The deal looked cheap based on underwriters’ assumptions.

The company was eyeing a 0% coupon in its price talk, which some sources felt was reasonable while others thought it was odd given the company’s sector.

Meanwhile, Shift Technologies Inc. priced an upsized $125 million of five-year convertible notes after the market close on Monday.

The small offering was not expected to trade much given the initial deal size of $75 million.

However, it was active in the aftermarket and skyrocketed on an outright and dollar-neutral basis.

Outside of the new paper, it was a relatively quiet day in the secondary space as equity markets wavered between gains and losses.

While equity benchmarks launched the day in the black, they closed on a weaker note with the Dow Jones industrial average down 81 points, or 0.24%, the S&P 500 index down 0.21% and the Nasdaq composite down 0.03%.

Ford Motor Co.’s 0% convertible notes due 2026 were active with the notes largely unchanged outright but improved dollar-neutral as the company prepares to unveil its electric vehicle platform at its Investor’s Day on Wednesday.

John Bean eyed

John Bean Technologies plans to price $350 million of five-year convertible notes after the market close on Tuesday with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 30% to 35%, according to a market source.

Underwriters were marketing the deal with assumptions of 300 basis points over Libor and a 36% vol.

Using those assumptions, the deal looked 1.86 points cheap at the midpoint of talk, a source said.

The pricing looked reasonable, a source said.

While the Chicago-based food processing and airport equipment company was eyeing a 0% coupon, it had solid fundamentals and a $4.5 billion market cap.

Unlike some of the other growth companies that priced with 0% coupons, “these guys make money,” the source said.

While the premium range seemed right, the yield talk was “a little light” for an industrial company, another source said.

Shift improves

Shift Technologies priced an upsized $125 million of five-year convertible notes after the market close on Monday at the midpoint of talk with a coupon of 4.75% and an initial conversion premium of 27.5%.

Price talk was for a coupon of 4.5% to 5% and an initial conversion premium of 25% to 30%, according to a market source.

The greenshoe was also upsized to $25 million.

The initial size of the offering was $75 million with a greenshoe of $11.25 million.

The new paper skyrocketed on an outright and dollar-neutral basis.

The notes expanded upwards of 4 to 5 points dollar-neutral.

The notes were changing hands at 105.5 versus a stock price of $6.69 in the late afternoon.

Shift Technologies’ stock traded to a high of $6.74 and a low of $6.50 before closing the day at $6.68, an increase of 1.06%.

Ford in focus

Ford’s 0% convertible notes due 2026 remained active on Wednesday on the eve of the car manufacturer’s Investor’s Day where it will unveil more additions to its electric-vehicle line-up.

The 0% convertible notes dropped about 1 point outright with stock off almost 2%.

They were changing hands at 103.5 in the late afternoon.

The notes were seen improved about 0.125 to 0.25 point dollar-neutral, a source said.

Ford’s stock spiked early in the session and traded as high as $13.43 before markets turned negative.

Stock traded as low as $12.80 before closing the day at $12.81, a decrease of 1.95%.

While down on Tuesday, Ford’s stock has been touching up against its 52-week high after unveiling its electric vehicle ambitions.

Ford’s 0% convertible notes hit 105 last Wednesday, the highest outright level for the notes since they priced in late March, after unveiling its electric F-150 and reporting a flurry of early orders.

Ford will unveil two electric vehicle platforms for full-size trucks and SUVS and for other cars and smaller SUVs on Wednesday as part of its pivot into the electric vehicle market, Reuters reported.

Mentioned in this article:

Ford Motor Co. NYSE: F

John Bean Technologies Corp. NYSE: JBT

Shift Technologies Inc. Nasdaq: SFT

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