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Morning Commentary: PAR Technology convertible expands; Intercept below par
By Abigail W. Adams
Portland, Me., April 11 – While PAR Technology Corp.’s deal was small, new paper was in focus in the convertibles secondary space on Thursday.
PAR Technology priced an upsized $70 million of five-year convertible notes after the market close on Wednesday with a coupon of 4.5% and an initial conversion premium of 32.5%.
The deal priced at the midpoint of talk for a coupon of 4.25% to 4.75% and an initial conversion premium of 30% to 35%, according to a market source.
The initial size of the deal was for $60 million.
The new paper traded up out of the gate. It was seen at 104.375 about one hour into Thursday’s session, according to a market source.
More than $13 million of the bonds were on the tape by the late afternoon.
PAR Technology stock was $22.13, an increase of 2.69%, shortly before 11 a.m. ET.
Stock took a hit during bookbuilding on Wednesday, dropping as much as 17% in intraday trading.
The stock drop on Wednesday helped lift the convertible notes on their secondary market debut, the source said.
Outside of the new paper, biotech companies were active on the tape.
Intercept Pharmaceuticals Inc.’s 3.25% convertible notes due 2023 dropped below par in active trading on Thursday as stock tanked on the release of additional data from one of the company’s clinical trials.
The 3.25% convertible notes dropped about 3.5 points outright. They were changing hands at 98.5 early in the session, according to a market source.
Stock was $106.42, a decrease of 11.82%, shortly before 11 a.m. ET. More than $5 million of the bonds were on the tape about one hour into Thursday’s session.
The 3.25% convertible notes have been active throughout the week in anticipation of the additional data.
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