Morning Commentary: LendingTree convertible offering eyed; Coupa active in early trading

By Abigail W. Adams

Portland, Me., July 21 – While the convertibles primary market has slowed its pace in the first few weeks of the third quarter, the new deal activity continues with one offering set to price after the market close.

LendingTree Inc. plans to price $500 million of five-year convertible notes after the market close on Tuesday with price talk for a coupon of 0.25% to 0.75% and an initial conversion premium of 27.5% to 32.5%.

The deal was heard to be marketed with assumptions of 500 basis points over Libor and a 40% vol., which modeled 2.5 points cheap at the midpoint of talk, a source said.

A portion of proceeds will be used to repurchase a portion of the company’s outstanding 0.625% convertible notes due 2022 in privately negotiated transactions.

The 0.625% notes changed hands on Monday at 173.625, according to Trace data.

The online loan marketplace priced a $300 million issue of the 0.625% notes in May 2017.

Meanwhile, after a sleepy start to the week, there was an uptick of activity in the secondary space with $97 million in reported volume about one hour into Tuesday’s session.

Coupa Software Inc.’s 0.375% convertible notes due 2026 were active early in the session with the notes trading down on an outright basis alongside stock.

The 0.375% notes were down more than 3 points outright to 124.875 with stock off about 3%, according to a market source.

There was more than $13 million in reported volume about one hour into the session.

Coupa Stock was traded as low as $301.03 shortly after the opening bell but was changing hands at $306.78, a decrease of 2.93%, shortly before 11 a.m. ET.

The business spend management company was trading off alongside the broader tech sector as the Nasdaq composite’s upward momentum faltered early Tuesday.

The company was also the subject of a recent article that appeared in Forbes, which stated the company’s stock had largely run its course after a 172% rise from its lows in March.

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