Morning Commentary: Convertibles secondary sees supply surge; Camtek, Arrival, Affirm up

By Abigail W. Adams

Portland, Me., Nov. 19 – It was an active morning in the convertibles secondary space as $3.35 billion in new supply from Camtek Ltd., Arrival SA, Bilibili Inc. and Affirm Holdings Inc. flooded the aftermarket.

The new paper was in demand during bookbuilding with three of the four deals upsizing and two pricing tighter than talk.

However, their performance in the secondary space was mixed with Bilibili’s new notes below par while the other deals traded up on an outright basis.

Camtek tucked away

Camtek priced an upsized $175 million of five-year convertible notes after the market close on Thursday at par with a coupon of 0% and an initial conversion premium of 30%.

The deal came in line with talk for a fixed coupon of 0% and richer than talk for an initial conversion premium of 22.5% to 27.5%.

The greenshoe was also upsized to $25 million.

The initial size of the offering was $140 million with a greenshoe of $20 million.

The new paper was not active early in the session with only a few trades on the tape.

“Those must have been put away,” a source said.

While volume was light, the 0% notes that did trade were up to 103.

Camtek’s stock was changing hands at $43.89, a decrease of 2.38%, shortly before 11 a.m. ET.

Arrival skyrockets

Arrival priced an upsized $275 million offering of five-year convertible notes after the market close on Thursday at par with a coupon of 3.5% and an initial conversion premium of 25%.

Pricing came at the midpoint of talk for a coupon of 3.25% to 3.75% and an initial conversion premium of 22.5% to 27.5%.

The greenshoe was also upsized to $45 million.

The initial size of the offering was $200 million with a greenshoe of $30 million.

The new paper skyrocketed on debut.

The notes were changing hands at 110.375 versus a stock price of $10.73 early in the session.

There was about $40 million in reported volume.

Affirm gains

Affirm priced an upsized $1.5 billion of five-year convertible notes after the market close on Thursday at par with a coupon of 0% and an initial conversion premium of 55%.

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

The greenshoe was also upsized to $225 million.

The initial size of the offering was $1.25 billion with a greenshoe of $187.5 million.

The new paper was putting in a strong performance on both an outright and dollar-neutral basis.

The 0% notes were changing hands at 100.875 versus a stock price of $135.69 early in the session.

There was $179 million in reported volume.

Affirm’s stock was $136.22, a decrease of 2.10%, shortly before 11 a.m. ET.

Bilibili below par

Bilibili priced $1.4 billion of five-year convertible notes after the market close on Thursday at par with a coupon of 0.5% and an initial conversion premium of 40%, according to a company news release.

Pricing came at the cheap end of talk for a coupon of 0% to 0.5% and an initial conversion premium of 40% to 45%, according to a market source.

The new paper was below par early in the session.

The 0.5% notes were trading at 99.625 versus an equity price of $67.39 early in the session.

There was $73 million in reported volume.

Bilibili’s American Depositary Shares were changing hands at $66.21, a decrease of 1.36%, shortly before 11 a.m. ET.

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