Morning Commentary: Alnylam Pharmaceuticals convertible notes offering in focus early

By Abigail W. Adams

Portland, Me., Sept. 12 – The convertibles primary market begin the week by launching a new offering of notes.

Alnylam Pharmaceuticals Inc. plans to price $900 million of five-year convertible notes after the market close on Monday with price talk for a coupon of 1.25% to 1.75% and an initial conversion premium of 30% to 35%.

The deal was heard to be in the market with assumptions of 375 basis points over Libor and a 45% vol., according to a market source.

Using those assumptions, the deal looked about 4 points cheap at the midpoint of talk, sources said.

The offering was interesting with the biopharmaceutical company a large cap company with a large negative EBITDA, a source said.

However, Alnylam is a leader in RNA interference therapeutics with several products on the market and several more in development.

The company recently released positive results from a clinical trial for its heart disease drug.

“It’s a little bit of a conundrum,” a source said. “It’s a huge market cap but maybe it will get better revenue and will look better from a flow perspective,” a source said.

Meanwhile, as market players eyed the new deal in the works, the secondary space was quiet as equity markets extended their rally.

The Dow Jones industrial average was up 250 points, or 0.78%, the S&P 500 index was up 0.88%, the Nasdaq Composite index was up 0.78% and the Russell 2000 index was up 0.72% shortly before 11 a.m. ET.

There was $31 million in reported volume about one hour into the session with few notable movers in the space.

© 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.