Morning Commentary: Everbridge convertible notes hit the market; Impinj offering eyed

By Abigail W. Adams

Portland, Me., Dec. 11 – New convertibles paper was in focus on Wednesday as issuers took advantage of one of the last weeks of the year for new deal activity.

Impinj Inc. plans to price $75 million of seven-year convertible notes after the market close on Wednesday.

The deal looked cheap based on underwriters’ assumptions, sources said. However, some felt the assumptions were too tight.

Everbridge Inc. priced $375 million of five-year convertible notes after the market close on Tuesday. The new paper was active in the secondary space and trading up on debut.

Impinj eyed

Impinj plans to price $75 million of seven-year convertible notes after the market close on Wednesday with price talk for a coupon of 1.5% to 2% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

Underwriters were marketing the deal with a credit spread of 550 basis points over Libor and a 40% vol., sources said.

Using those assumptions, the deal modeled up to 2.5 points cheap, a source said.

However, some felt the deal deserved a wider credit spread and higher vol., especially given its market cap.

The Seattle-based manufacturer of radio frequency identification devices and software has a small market cap of $682 million.

Using a credit spread of 700 bps over Libor and a 45% vol., the deal modeled out to 0.87 point cheap, the source said.

Impinj stock was taking a hit following the convertible notes offering. Stock dropped to $29.15, a decrease of 5.42%, shortly before 11 a.m. ET.

Everbridge trades up

Everbridge priced $375 million of five-year convertible notes after the market close on Tuesday at par with a coupon of 0.125% and an initial conversion premium of 35%, according to a market source.

Pricing came at the midpoint of talk for a coupon of 0% to 0.25% and an initial conversion premium of 32.5% to 37.5%, according to a market source.

The new paper was active in the secondary space and was trading up on debut.

The 0.125% notes were seen at 100.25 early in the session with stock down almost 2%.

Everbridge stock traded down to $80.26, a decrease of 3.5%, shortly before 11 a.m. ET.

There was about $7 million of the bonds on the tape about one hour into the session.

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