Morning Commentary: Shopify, Medallia convertibles price; Medallia trades up on debut

By Abigail W. Adams

Portland, Me., Sept. 16 – Two new convertible bonds totaling $1.3 billion hit the aftermarket on Wednesday.

Shopify Inc. priced $800 million of five-year convertible notes and Medallia Inc. sold $500 million of five-year convertible notes after the market close on Tuesday.

Medallia’s convertible notes soared on an outright and dollar-neutral basis early in the session.

Shopify prices

Shopify priced $800 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 60%, according to a market source.

Pricing came in line with talk for a fixed coupon of 0.125% and richer than initial talk for an initial conversion premium of 52.5% to 57.5%, according to a market source.

Concurrently with the convertible notes offering, the company priced a secondary offering of 1.1 million class A subordinate voting shares at $900.00 per share.

Medallia soars

Medallia priced $500 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%.

Pricing came at the rich end of talk for a coupon of 0.125% to 0.625% and at the midpoint of talk for an initial conversion premium of 32.5% to 37.5%, according to a market source.

The new paper skyrocketed in active trading early in the session.

The 0.125% notes traded as high as 103.5 out of the gate with stock off more than 4%.

Medallia stock traded down to $27.92, a decrease of 4.22%, shortly before 11 a.m. ET.

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