CryoLife convertibles trade up on debut; GSK active; Allegheny sinks; One Medical gains

By Abigail W. Adams

Portland, Me., June 19 – Primary activity in the convertibles market was slow over the past week with three deals totaling $665 million pricing.

CryoLife Inc. rounded out the new deal activity and priced $100 million of five-year convertible notes after the market close on Thursday.

While the primary market is not expected to be as active as it has been in the upcoming week, there are deals in the pipeline, a market source said.

Meanwhile, the convertibles secondary space was volatile on Friday with the market firm alongside equities early in the session.

However, the market was weak as equities sold off in the afternoon.

There was about $600 million on the tape in the late afternoon.

CryoLife’s new convertible notes were active and trading up on both an outright and dollar-neutral basis.

GSK Finance No. 3 plc (GlaxoSmithKline plc)’s 0% exchangeable notes due 2023 (A2/A) tied to Theravance Biopharma Inc. stock remained active although the notes were largely trading sideways.

Allegheny Technologies Inc.’s newly priced 3.5% convertible notes due 2025 sank further below par as the stock continued its downward spiral.

Several outstanding convertible notes returned to focus over the past week due to the pause in primary market activity, a source said.

1Life Healthcare Inc.’s (One Medical) 3% convertible notes due 2025 were on the rise on Friday as stock jumped following an analyst upgrade.

CryoLife trades up

CryoLife priced $100 million of five-year convertible notes after the market close on Thursday at par at the cheap end of talk with a coupon of 4.25% and an initial conversion premium of 35%.

Price talk was for a coupon of 3.75% to 4.25% and an initial conversion premium of 35% to 40%, according to a market source.

The new paper was trading up on both an outright and dollar-neutral, or hedged, basis.

The 4.25% notes traded up to 102.5 soon after the opening bell and continued to climb as the session progressed.

They traded north of 105 in the late afternoon.

The notes expanded about 0.5 point dollar-neutral early in the session and were seen up 1.5 points dollar-neutral in the late afternoon, sources said.

Despite the small size of the issue, the notes were active with $25 million in reported volume.

CryoLife stock traded to a low of $17.94 and a high of $19.34 before closing the day at $18.89, an increase of 8.69%.

Day 2

GSK’s 0% exchangeable notes due 2023 tied to Theravance stock remained active their second day in the secondary space.

However, the notes were largely moving sideways.

The 0% notes continued to trade around 110.

There was about $20 million in reported volume by the late afternoon.

Theravance stock traded to a low of $20.96 and a high of $21.98 before closing the day at $21.88, an increase of 4.27%.

Allegheny’s 3.5% convertible notes due 2025 sank further below par their second day in the secondary space.

The 3.5% notes traded down to a 96-handle in the late afternoon, a source said.

However, volume was light with about $7 million on the tape.

Allegheny stock continued its downward momentum on Friday.

Stock traded to a low of $9.65 and a high of $10.66 before closing the day at $9.91, a decrease of 5.35%.

1Life jumps

1Life Healthcare’s 3% convertible notes due 2025 jumped on an outright basis as stock soared following an analyst upgrade.

The 3% notes climbed more than 3.5 points outright to trade up to a 104-handle in the late afternoon.

More than $11 million of the bonds were on the tape by the late afternoon.

1Life Healthcare stock traded to a low of $32.55 and a high of $36.26 before closing the day at $35.76, an increase of 10.17%.

Stock jumped after a Canaccord analyst initiated coverage of the company with a buy rating and set a price target of $39.00.

The membership-based primary health care platform also recently announced a partnership with Maryland and Washington D.C.-based health care system MedStar Health to provide coordinated care across primary and specialty care settings, according to a company news release.

Mentioned in this article:

1Life Healthcare Inc. Nasdaq: ONEM

Allegheny Technologies Inc. NYSE: ATI

CryoLife Inc. NYSE: CRY

Theravance Biopharma Inc. Nasdaq: TBPH

© 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.