Camtek on tap; Arrival, Stem convertible offerings eyed; Unity, Norwegian, Veritone gain

By Abigail W. Adams

Portland, Me., Nov. 17 – The deluge of new convertible bonds continued on Wednesday with two deals totaling $550 million set to price after the market close, one $140 million offering on deck for Thursday and three deals totaling $2.675 billion making their aftermarket debut.

Camtek Ltd. plans to price $140 million of five-year convertible notes after the market close on Thursday with price talk for a fixed coupon of 0% and an initial conversion premium of 22.5% to 27.5%, according to a market source.

BofA Securities Inc. and Barclays are bookrunners for the Rule 144A offering, which carries a greenshoe of $20 million.

Stem, Inc. plans to price $350 million of seven-year convertible notes and Arrival SA plans to price $200 million of five-year convertible notes after the market close on Wednesday.

Both offerings are being marketed as green convertible notes and looked cheap based on underwriters’ assumptions, although the companies were speculative, sources said.

As market players eyed the new deals in the pipeline, new paper from Unity Software Inc., NCL Corp. Ltd. and Veritone Inc. made its aftermarket debut.

The new paper was mixed on an outright basis. However, all saw large dollar-neutral expansions.

Green convertibles

Arrival plans to price $200 million of five-year green convertible notes after the market close on Wednesday with price talk for a coupon of 3.25% to 3.75% and an initial conversion premium of 22.5% to 27.5%.

The deal from the Luxembourg-based electric vehicle manufacturer was in the market with assumptions of 850 basis points over Libor and a 45% vol., according to a market source.

Using those assumptions, the deal looked 8 points cheap at the midpoint of talk.

The borrow on the stock was difficult, which accounted for some of the cheapness in the deal.

Stem plans to price $350 million of seven-year green convertible notes after the market close on Wednesday with price talk for a coupon of 0.5% to 1% and an initial conversion premium of 27.5% to 32.5%.

The deal was heard to be in the market with assumptions of 425 bps over Libor and a 43% vol., according to a market source.

Using those assumptions, the deal looked 2.54 points cheap at the midpoint of talk.

While both companies were speculative credits, the notes were optically more attractive than some of the other deals to price recently, a source said.

Unity in demand

Unity Software priced $1.5 billion of five-year convertible notes after the market close on Tuesday at par with a coupon of 0% and an initial conversion premium of 57.5%.

Pricing came at the rich end of initial talk for a coupon of 0% to 0.25% and richer than initial talk for an initial conversion premium of 47.5% to 52.5%.

The new paper traded in a range of par to 102.375 on an outright basis early in the session.

It was changing hands at 100.875 versus an equity price of $194.67 early in the session.

The notes continued to come in on an outright basis as the session progressed.

They were seen changing hands just north of par versus an equity price of $191.68 in the late afternoon, according to a market source.

While the notes stood poised to close the day at par, they expanded about 1.25 points dollar-neutral, a source said.

The notes were in focus with more than $109 million in reported volume.

Unity’s stock traded to a high of $198.71 and a low of $190.06 before closing the day at $191.80, a decrease of 2.07%.

Norwegian sails

NCL priced an upsized $1 billion of six-year exchangeable notes after the market close on Tuesday at par with a coupon of 1.125% and an initial conversion premium of 42.5%.

Pricing came at the rich end of talk for a coupon of 1.125% to 1.625% and an initial exchange premium of 37.5% to 42.5%, according to a market source.

The greenshoe was also upsized to $150 million.

The initial size of the offering was $800 million with a greenshoe of $120 million.

Concurrently, the company priced a secondary offering of 42,858,854 shares at a price of $23.64 per share.

The new paper was wrapped around par in active trading with stock flat early in the session.

However, the 1.125% notes gained as the session progressed.

They were seen changing hands at 100.5 versus a stock price of $23.86 in the late afternoon.

The notes expanded about 1 point dollar-neutral, a source said.

There was about $90 million in reported volume.

Stock traded to a high of $24.31 and a low of $23.18 before closing the day at $24, an increase of 1.57%.

Veritone upsizes

Veritone priced an upsized $175 million of five-year convertible notes after the market close on Tuesday at par with a coupon of 1.75% and an initial conversion premium of 32.5%.

Pricing came at the midpoint of talk for a coupon of 1.5% to 2% and at the rich end of talk for an initial conversion premium of 27.5% to 32.5%.

The greenshoe was also upsized to $26.25 million.

The initial size of the offering was $150 million with a greenshoe of $22.5 million.

The small offering outperformed in the secondary space.

The 1.75% notes were changing hands at 101.875 versus a stock price of $26.77 in the late afternoon.

The notes expanded 2.5 to 3 points dollar-neutral, a source said.

There was about $65 million in reported volume.

Veritone’s stock traded to a high of $27.58 and a low of $26.02 before closing the day at $26.95, a decrease of 2.85%.

Mentioned in this article:

Arrival SA Nasdaq: ARVL

Camtek Ltd. Nasdaq: CAMT

Norwegian Cruise Line Holdings Ltd. NYSE: NCLH

Stem, Inc. NYSE: STEM

Unity Software Inc. NYSE: U

Veritone Inc. Nasdaq: VERI

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