ConMed convertibles on tap; Asian names rally; Pinduoduo jumps; Insulet up on swap

By Abigail W. Adams

Portland, Me., May 31 – The convertibles primary market launched the week with a new offering as the secondary space continued to firm.

ConMed Corp. plans to price $600 million of five-year convertible notes after the market close on Wednesday with price talk for a coupon of 2.25% to 2.75% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

J.P. Morgan Securities LLC is the bookrunner for the Rule 144A offering, which carries a greenshoe of $100 million.

Meanwhile, the convertibles secondary space was hot again as buyers returned to the market – a stark contrast from early last week when people were “running for the exits,” a source said.

Equity markets launched the day in the red as the Federal Reserve’s balance sheet runoff commences; however, they pared their losses as the session progressed.

While indexes closed the day in the red, the Nasdaq Composite index and S&P 500 index flirted with positive territory in intraday activity.

The Dow Jones industrial average closed down 223 points, or 0.67%, the S&P 500 index closed down 0.63%, the Nasdaq Composite index closed down 0.41% and the Russell 2000 index closed down 1.26%.

There was $74 million in reported volume about one hour into the session and $393 million in reported volume heading into the market close.

The convertible notes of China-based companies were once again sought after following a slew of positive earnings and an easing of Covid lockdowns.

Pinduoduo Inc.’s 0% convertible notes due 2025 were on the rise in heavy volume as the company’s equity continued to improve after a large earnings beat the previous week.

Bilibili Inc.’s 0.5% convertible notes due 2026 were also making gains.

Insulet Corp.’s 0.375% convertible notes due 2026 were lower outright but up on swap as the company’s stock crashed as a speculated takeover was debunked.

ADRs rally

It was a strong day for the convertible notes of China-based companies on Tuesday as the ADR space continued to rally following an easing of Covid lockdowns and positive earnings results.

Pinduoduo’s 0% convertible notes due 2025 were on the rise in heavy volume.

The notes jumped about 2 points outright to an 89-handle.

They were changing hands just north of 89 heading into the market close.

The high-premium notes trade for their yield, which was 7.875% shortly before the market close.

There was $14 million in reported volume.

While not equity sensitive, the Shanghai-based e-commerce platform’s American Depositary Shares continued to climb following strong earnings the previous week.

Pinduoduo’s ADSs traded to a low of $48.86 and a high of $52.79 before closing the day at $50.35, an increase of 4.24%.

Bilibili’s 0.5% convertible notes due 2026 were also on the rise with the long-busted 0.5% notes up 1.5 points outright.

The 0.5% notes were trading at 67.5 versus an equity price of $22.41 early in the session with a yield of 17%, according to a market source.

There was $5 million in reported volume.

The notes are also not equity sensitive.

However, the Shanghai-based video sharing website’s ADSs also made strong gains during Tuesday’s session.

The ADSs traded to a low of $22.17 and a high of $23.70 before closing the day at $22.35, an increase of 5.18%.

Insulet up on swap

Insulet’s 0.375% convertible notes due 2026 were down outright but up on swap as the medical device company’s stock crashed after a speculated takeover was debunked.

The 0.375% notes fell 5 points outright with stock off more than 9%.

The notes were changing hands at 113.375 versus a stock price of $211.18 in the late afternoon.

There was $8 million in reported volume.

Insulet’s stock traded to a low of $199.56 and a high of $217.27 before closing the day at $213.48, a decrease of 9.24%.

Stock tanked after DexCom Inc. issued a statement denying that it was engaging in talks to take over Insulet.

Rumors had circulated the previous week about a prospective takeover.

Mentioned in this article:

ConMed Corp. NYSE: CNMD

Bilibili Inc. Nasdaq: BILI

Insulet Corp. Nasdaq: PODD

Pinduoduo Inc. Nasdaq: PDD

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