FXCM's $125 million planned deal seen slightly cheap; Tesla jumps; Concur, NetSuite ahead

By Rebecca Melvin

New York, May 28 - FXCM Inc. launched an offering of $125 million of five-year convertible senior notes before the market open on Tuesday that was seen about 1% cheap at the midpoint of price talk, although at least one source thought the deal would come at the tight end of talk or re-price.

The FXCM deal was not heard in the gray market before final terms were expected to be fixed after the market close. Syndicate sources could not be reached to confirm timing and talk on the deal.

"It's a different company," an East Coast-based buysider said, referring to the New York-based company's business as an online provider of foreign exchange, trading and related services.

"It's a small, balanced convertible bond, and the market is responding accordingly," the buysider said.

Tesla Motors Inc.'s 1.5% convertible bonds, which priced in the middle of this month, jumped nearly 4 points to more than 106 as the underlying shares of the Palo Alto, Calif.-based electric car maker surged.

The convertibles of Exide Technologies, a small deal that comes due in September, traded small, but rebounded to 22.5 on Tuesday from 13 on Friday amid chatter that the Milton, Ga.-based battery maker and recycler was lining up debtor-in-possession financing.

After the market close, two companies launched deals with identical pricing points. Concur Technologies Inc. launched an offering of $350 million of five-year convertible senior notes and NetSuite Inc. launched an offering of $270 million of five-year convertible senior notes. Both were talked to yield 0.5% to 1% with an initial conversion premium of 27.5% to 32.5%, according to market sources.

Overall, the convertibles market was quiet on the first trading day of the week following the long holiday weekend for Memorial Day.

One source didn't see many catalysts for trading during the upcoming four-day week going into the summer months. He thought new deals and the upcoming annual meeting of the American Society of Clinical Oncology, which is likely to foster some activity in the high-beta biotechnology sector, were the best bets for trading action.

"I think you are going to see a good issuance calendar before we hit the summer slowdown," the source said. "Other than that, there is not a lot of natural company news on the horizon."

Positive economic data supported another record high for the Dow Jones industrial average, which had run up more than 200 points at the open, but pared those gains to end up 106.29 points, or 0.7%, to 15,409.39. The S&P 500 stock index gained 10.48 points, or 0.6%, to 1,660.08; and the Nasdaq stock market lifted 29.74 points, or 0.9%, to 3,488.89.

FXCM seen a little cheap

FXCM launched an offering of $125 million of five-year convertible senior notes before the market open that was talked at the midpoint of price points to yield 2.5% with an initial conversion premium of 30%.

The Rule 144A deal was being sold by joint bookrunners BofA Merrill Lynch and Credit Suisse Securities (USA) LLC, market sources said.

"It will probably come at the tight end or it may even be re-priced," an East Coast-based buysider said.

"This is right down the line as far as what has been pricing whether its hedgies or outrights, and it doesn't look like too bad of a borrow. There's not a huge amount of short outstanding," the buysider said.

He deemed the company's business as a retail foreign exchange trading business as a positive. "It's a financial but it's not one of the two basic flavors we've had, which is either a business development company or a mortgage real estate investment trust, or other mortgage related entity. It's been the carry trade in one form or another, and it's been really mortgage heavy, but this is different, it's retail," he said.

He said involvement in the deal boiled down to what investors thought of the business fundamentals.

The deak has an $18.75 million greenshoe.

Proceeds will be used to repay about $80 million of borrowings under a revolving credit facility and for general corporate purposes, including potential future acquisitions and also to pay the net cost of a call spread.

New York-based FXCM is an online provider of foreign exchange, trading and related services.

Concur to price

Concur Technologies' $350 million of convertibles were seen pricing after the market close Wednesday with a 0.5% to 1% yield and a 27.5% to 32.5% initial conversion premium.

The Rule 144A deal has a $52.5 million greenshoe and was being sold by joint bookrunners Credit Suisse Securities, J.P. Morgan Securities LLC and Deutsche Bank Securities Inc.

The bonds of the Redmond, Wash.-based provider of integrated travel and expense management services for companies will be non-callable. They have net share settlement and contingent conversion at a 130% price hurdle, as well as takeover protection and standard dividend protection.

Proceeds will be used for general corporate purposes, including potential acquisitions and strategic transactions and to pay the net cost of a call spread.

NetSuite to price

NetSuite planned to price $270 million of five-year convertible senior notes after the market close Wednesday that were talked to yield 0.5% to 1% with an initial conversion premium of 27.5% to 32.5%.

The Rule 144A deal has a $40 million greenshoe and was being sold by joint bookrunners JPMorgan and Barclays, with JMP Securities acting as a co-manager.

The bonds of the San Mateo, Calif.-based provider of cloud-based financials and enterprise resource planning software will be non-callable, with no puts. They have takeover protection.

Proceeds will be used for working capital and other general corporate purposes, including possible acquisitions and to buy back about $30 million of shares of common stock.

Mentioned in this article:

Concur Technologies Inc. Nasdaq: CNQR

Exide Technologies Nasdaq: XIDE

NetSuite Inc. NYSE: N

FXCM Inc. Nasdaq: FXCM

Tesla Motors Inc. Nasdaq: TSLA

© 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.