Progress Software contracts on debut; Ionis, Verint below par; Cable One active

By Abigail W. Adams

Portland, Me., April 9 – The last new deal of the week hit the convertible secondary space on Friday.

Progress Software Corp. priced an upsized $325 million of five-year convertible notes after the market close on Thursday.

The new paper had a lackluster secondary market debut with the notes flat on an outright basis and contracted dollar-neutral.

Progress Software’s deal brought the weekly tally for new issuance to $1.975 billion, which priced over five deals.

While a far cry from the rapid-fire pace in March, the new deal activity was more than some sources expected with companies entering into earnings season blackouts.

Equity markets were strong throughout the week with benchmarks setting new records as the tech sector continued to roar back from its March trough.

However, there continued to be pain in the convertible secondary space, which sources attributed to the deluge of new paper in recent months.

Ionis Pharmaceuticals Inc.’s 0% convertible notes due 2026 dropped below par in active trading on Friday.

Verint Systems Inc.’s 0.25% convertible notes due 2026 also dropped below par.

Cable One Inc.’s 0% convertible notes due 2026 were active on Friday with the notes continuing to trade below par, which is where they have been since pricing in early March.

Progress contracts

Progress Software priced an upsized $325 million of five-year convertible notes after the market close on Thursday at par with a coupon of 1% and an initial conversion premium of 27.5%, according to a market source.

Pricing came at the midpoint of talk for a coupon of 0.75% to 1.25% and an initial conversion premium of 25% to 30%, according to a market source.

The notes fell flat on an outright basis in the aftermarket.

They were trading in a range of 99.25 and 100.25 with stock off early in the session.

They remained wrapped around par in the afternoon.

While the notes were flat dollar-neutral early in the session, they contracted about 0.25 point as the session progressed, sources said.

Progress Software stock traded to a high of $44.99 and a low of $44.01 before closing the day at $44.79, a decrease of 0.33%.

Below par

Two of the five deals to price over the course of the week dropped below par on Friday.

Ionis’ 0% convertible notes due 2026 were down about 1 point outright their second day in the secondary space.

They were marked at 99 bid, 99¾ offered in the late afternoon with stock off about 1%.

While below par, the notes were largely moving inline dollar-neutral, a source said.

Ionis stock traded to a high of $42.98 and a low of $41.49 before closing the day at $42.36, a decrease of 0.77%.

Verint Systems’ 0.25% convertible notes due 2026 also dropped below par on Friday.

The notes traded down about 0.75 point outright with stock off more than 1%.

They were changing hands at 99.25 versus a stock price of $45.94 in the late afternoon.

Verint stock traded to a high of $46.80 and a low of $45.50 before closing the day at $46.20, a decrease of 1.28%.

The analytics company priced a $275 million issue of the 0.25% notes on Tuesday.

Cable One active

Cable One’s 0% convertible notes due 2026 were active on Friday although with little movement in price.

The 0% notes continued to trade below par.

They were changing hands at 98.5 versus a stock price of $1,775.75 in the late afternoon.

There was about $12 million in reported volume.

Cable One stock traded to a high of $1,796.41 and a low of $1,761.94 before closing the day at $1,786.75, an increase of 0.19%.

Cable One priced a $520 million tranche of the 0% notes at par as part of a two-tranche offering in early March.

The notes struggled on their aftermarket debut and have remained below par since hitting the secondary space on March 2.

Mentioned in this article:

Cable One Inc. NYSE: CABO

Ionis Pharmaceuticals Inc. Nasdaq: IONS

Progress Software Corp. Nasdaq: PRGS

Verint Systems Inc. Nasdaq: VRNT

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