Amphastar convertible offering eyed; Vishay’s struggles continue; Envista notes active

By Abigail W. Adams

Portland, Me., Sept. 12 – The convertibles primary market cooled its pace in the early days of the Sept. 11 week although it remained active with one deal on deck.

Amphastar Pharmaceuticals Inc. plans to price $300 million of long five-year convertible notes after the market close on Tuesday.

While the deal did not model as cheaply as some other recent offerings, pricing was heard to be coming on the wide end of talk with the offering multiple times oversubscribed.

While the primary market saw a relatively slow start to the week, more activity is expected with the calendar still robust.

Meanwhile, it was another quiet day in the convertibles secondary space with equity markets mixed for most of the session but falling into negative territory by the close ahead of Wednesday’s pre-market release of the Consumer Price Index report.

The Dow Jones industrial average closed Tuesday down 18 points, or 0.05%, the S&P 500 index closed down 0.57%, the Nasdaq Composite index closed down 1.04% and the Russell 2000 index closed down 0.03%.

There was $86 million in reported volume about one hour into the session and $327 million on the tape in the late afternoon with several recent deals remaining active.

Vishay Intertechnology Inc.’s 2.25% convertible notes due 2030 (BB+) continued to struggle in active trade.

Envista Holdings Corp.’s 1.75% convertible notes due 2028 (Baa3), which priced in early August, also saw heavy volume on Tuesday although with little movement in price.

Amphastar oversubscribed

Amphastar plans to price $300 million of long five-year convertible notes after the market close on Tuesday with initial price talk for a coupon of 1.5% to 2% and an initial conversion premium of 30% to 35%.

The deal was heard to be in the market with assumptions of 375 basis points over SOFR and a 40% vol., according to a market source.

Using those assumptions, the deal modeled 1.125 points cheap at the midpoint of talk, a source said.

The deal modeled richer than other recent offerings which were coming with about 2 to 2.5 points of cheapness.

However, pricing was heard to have been revised to the cheap end of talk with a coupon range of 1.875% to 2% and a fixed initial conversion premium of 30%, a source said.

Amphastar’s stock also got hammered during Tuesday’s session, closing the day at $46.64, a decrease of 9.21%.

The deal was heard to be multiple times oversubscribed at the wide end of talk with books closing in the early afternoon.

Vishay struggles continue

Vishay’s 2.25% convertible notes due 2030 continued to struggle in the aftermarket on Tuesday.

The notes broke below a 99-handle and were changing hands in the 98.75 to 99.25 context on a weak day for stock.

The notes were wrapped around 99 versus a stock price of $24.96 in the late afternoon, according to a market source.

There was $12 million in reported volume.

Vishay’s stock traded to a low of $24.67 and a high of $25.09 before closing at $24.96, off 0.36%.

The notes have underperformed since pricing on Sept. 7 with the refinancing deal coming richer than the other deals to price in the new issue frenzy late last week.

Envista trades

Envista’s 1.75% convertible notes due 2028 (Baa3) saw heavy volume on Tuesday with some large trades on the tape.

The notes were relatively unchanged as they switched hands.

The 1.75% notes traded at 95.125 versus a stock price of $30.53 early in the session, according to a market source.

They traded at 95.25 versus a stock price of $30.68 in the late afternoon.

While only two trades were on the tape, there was $7 million in reported volume.

Envista’s stock traded to a high of $30.80 and a low of $30.36 before closing at $30.47, down 0.16%.

Envista’s 1.75% convertible notes were a part of a wave of issuance in early August that underperformed in the secondary.

Sources attributed the underperformance to the tight pricing of the notes.

Mentioned in this article:

Amphastar Pharmaceuticals Inc. Nasdaq: AMPH

Envista Holdings Corp. NYSE: NVST

Vishay Intertechnology Inc. NYSE: VSH

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