Morning Commentary: Repligen convertible offering eyed, looks cheap; Twitter in focus

By Abigail W. Adams

Portland, Me., July 16 – After a week of no deals, the convertibles primary market was preparing one new offering on Tuesday, which is set to price after the market close.

Repligen Corp. plans to price $250 million of five-year convertible notes with price talk for a coupon of 0.375% to 0.875% and an initial conversion premium of 27.5% to 32.5%.

Underwriters were marketing the deal with assumptions of 350 basis points over Libor and a 36% vol., according to a market source.

Sources pegged the deal about 1.15 points cheap using those assumptions.

The convertible notes offering is pricing concurrently with a $100 million common stock offering.

Repligen may enter into privately negotiated exchange transactions with holders of its 2.125% notes due 2021 to exchange a portion of the notes for a combination of cash and shares.

The company intends to call the remaining 2.125% notes at the closing of the offering.

There is about $115 million outstanding in the 2.125% notes, which are deep in the money. The 2.125% notes were last seen trading around 270, according to Trace data.

Meanwhile, the secondary space was again off to a slow start with $44 million on the tape about one hour into Tuesday’s session.

Twitter Inc.’s 0.25% convertible notes due 2024 were in focus with the notes gaining on an outright basis as stock dropped off.

The 0.25% notes rose about 1 point outright to change hands at 101.5, a market source said. The notes saw more than $7 million in reported volume.

They were previously changing hands at 100.375, a source said.

While Twitter’s stock was up more than 2% on Monday, it was giving back some of its gains early in Tuesday’s session.

Twitter stock was changing hands at $38.46, a decrease of 0.57%, shortly before 11 a.m. ET.

The social media platform is scheduled to report earnings on July 26.

© 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.