Morning Commentary: SoFi convertible notes on tap; Brookdale jumps in aftermarket debut

By Abigail W. Adams

Portland, Me., Sept. 29 – The convertibles primary market continued to churn out new offerings as the end-of-quarter approaches with one new offering slated to price after the market close.

SoFi Technologies Inc. plans to price $750 million of five-year convertible notes after the market close on Wednesday.

The deal looked cheap based on underwriters’ assumptions.

Meanwhile, Brookdale Senior Living Inc.’s priced $200 of five-year convertible notes after the market close on Tuesday.

While volume in the name was light, the new paper jumped on its secondary market debut.

SoFi notes on deck

SoFi Technologies plans to price $750 million of five-year convertible notes after the market close on Wednesday with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 37.5% to 42.5%, according to a market source.

The deal was heard to be in the market with assumptions of 325 basis points over Libor and a 42% vol., according to a market source.

Using those assumptions, the deal looked 1.64 points cheap at the midpoint of talk.

Brookdale comes rich

Brookdale Senior Living priced $200 million of five-year convertible senior notes after the market close on Tuesday at par with a coupon of 2% and an initial conversion premium of 35%.

Pricing came at the rich end of talk for a coupon of 2% to 2.5% and an initial conversion premium between 30% to 35%.

The deal was heard to be in demand during bookbuilding despite the bloodletting in equities during Tuesday’s session.

While trading volume in the name was light, it was making large gains in the secondary space.

The notes were changing hands between 104.5 and 105.5 early in the session, a source said.

Brookdale’s stock was $6.16, an increase of 2.84%, shortly before 11 a.m. ET.

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