Morning Commentary: Enphase Energy convertibles price; Nio notes continue to decline

By Abigail W. Adams

Portland, Me., May 31 – The convertibles primary market rounded out an active week with a new deal pricing.

Enphase Energy Inc. sold $120 million of five-year convertible notes prior to the market open on Friday at par to yield 1% with an initial conversion premium of 30%.

Pricing came in line with talk for a fixed coupon of 1% and at the rich end of talk for an initial conversion premium of 25% to 30%, according to a market source.

The deal was in demand during bookbuilding.

With proceeds used to take out Enphase Energy’s 4% convertible notes due 2023, holders of the existing notes were major participants of the new offering, a source said.

There was also high demand from a broader investor base.

The 4% convertible notes due 2023 skyrocketed since pricing in August 2018, reaching almost triple par.

Proceeds from Enphase Energy’s new offering will be used to repurchase the outstanding $60 million of the company’s 4% convertible notes due 2023 in privately negotiated transactions.

Holders will receive an aggregate 10.8 million shares of common stock, in addition to a $6 million cash amount in the exchange, according to a company news release.

The new 1% convertible notes due 2024 were not seen on the tape early in Friday’s session.

The notes may be slow to trade with buyers holding onto the notes, another source said.

While the new paper to price over the past week was slow to trade, volume was decent for early in Friday’s session, a market source said.

There was about $80 million on the tape a little over one hour into Friday’s session.

Nio Inc.’s 4.5% convertible notes due 2024 were in focus with the notes continuing their downward spiral.

The notes dropped another 3 points outright to trade down to 59.

The Shanghai-based electric car manufacturer’s ADSs continued to trade down in the wake of the company’s earnings report.

Nio’s ADSs was $3.11, a decrease of 4.01%, shortly before 11 a.m. ET.

© 2015 Prospect News.
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