Coupa Software convertibles surge on acquisition; BlackLine, DISH notes active

By Abigail W. Adams

Portland, Me., Dec. 12 – The convertibles primary market was quiet on Monday following one of the highest volume weeks of the year.

While there may be scattered activity in the days ahead, sources do not expect a deluge with most business completed in the previous week’s end-of-year rush, sources said.

Meanwhile, trading volume in the secondary space continued to moderate as activity surrounding new paper diminished.

Equity indexes launched the week strong as markets await the Tuesday release of November’s Consumer Price Index report and the Federal Open Market Committee decision on Wednesday.

The Dow Jones industrial average closed Monday up 529 points, or 1.58%, the S&P 500 index closed up 1.43%, the Nasdaq Composite index closed up 1.26% and the Russell 2000 index closed up 1.22%.

There was $46 million in reported volume about one hour into the session and $430 million on the tape about one hour before the market close.

Topical news was the driving force of trading activity in the space with Merger Monday launching Coupa Software Inc.’s convertible notes into the spotlight.

Coupa’s convertible notes surged outright and dollar-neutral after Thoma Bravo’s long-rumored takeover of the company was formerly announced.

BlackLine Inc.’s 0% convertible notes due 2026 were active with the notes rising outright alongside stock.

DISH Network Corp.’s 3.375% convertible notes due 2026 (B2/CCC) were also making outright gains in active trade although the notes were largely moving in line dollar-neutral.

Coupa’s takeover

Coupa was the name of the day on Monday after Thoma Bravo’s long-rumored takeover of the company was formerly announced.

Coupa’s 0.375% convertible notes due 2026 jumped 9 points outright to 96.625 early in the session, according to a market source.

They remained on a 96-handle throughout the session and were seen changing hands at 96.375 in the late afternoon.

There was $26 million in reported volume.

Coupa’s 0.125% convertible notes due 2025 jumped 6 points outright to 97.

There was $21 million in reported volume.

Both tranches jumped 4 to 5 points dollar-neutral, a source said.

Coupa’s stock traded to a low of $78.50 and a high of $78.79 before closing the day at $78.65, an increase of 26.67%.

Thoma Bravo’s long-rumored acquisition of the business spend management software company was part of a whirlwind of end-of-year M&A activity announced on Monday.

Thoma Bravo will pay $81 per share in cash for Coupa in a deal with an enterprise value of $8 billion.

The convertible notes will be taken out in the acquisition.

The convertible notes were trading based on their par put takeout, a source said.

Their dollar-neutral gains on Monday were on top of the notes’ 4 point expansion in late November when news of the potential takeover first hit the market.

BlackLine active

BlackLine’s 0% convertible notes due 2026 were active with the notes gaining outright alongside stock.

The high-premium notes were up about 0.5 point outright with stock up more than 4%.

The notes were changing hands at 85.375 versus a stock price of $69.80 in the late afternoon.

There was $14 million in reported volume.

BlackLine’s stock traded to a low of $65.47 and a high of $70.96 before closing the day at $69.27, an increase of 4.65%.

DISH in focus

DISH’s 3.375% convertible notes due 2026 were on the rise outright but unchanged dollar-neutral in active trade on Monday.

The 3.375% notes rose 1 point outright with stock up more than 4%.

They were changing hands at 63.5 versus a stock price of $15.23 in the late afternoon.

There was $10 million in reported volume.

DISH’s stock traded to a low of $14.66 and a high of $15.45 before closing the day at $15.40, an increase of 4.48%.

Mentioned in this article:

BlackLine Inc. Nasdaq: BL

Coupa Software Inc. Nasdaq: COUP

DISH Network Corp. Nasdaq: DISH

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