Morning Commentary: NIO convertibles jump on cash infusion; merger news sends Alteryx higher

By Cristal Cody

Tupelo, Miss., Dec. 18 – NIO Inc.’s 3.875% convertible notes due 2029 jumped over 5 points in the most active issue seen moving early Monday after reporting a $2.2 billion cash infusion.

“This is just bulking up the balance sheet, which is always a positive for bondholders,” a source said.

While volume was light at $6 million of paper trading, the issue was the top performer an hour into the session, the source said.

Overall market tone was mostly positive as overall action slows in the final week ahead of Christmas Day.

The S&P 500 index rose 0.44%, the Dow Jones industrial average increased 0.2% and the Nasdaq index improved 0.35%. The Russell 2000 was the lone index in the red over the morning and was down 0.05%.

Treasury yields were up 1 basis point to 3 bps on the long end early in the session.

Alteryx, Inc. was active after the company reported it will be acquired by global private equity firms Clearlake Capital Group, LP and Insight Partners for $4.4 billion in cash and debt.

Alteryx’s 1% convertible notes due 2026 jumped nearly 7 points higher Monday morning, but overall activity was light with just odd lots traded, a source said.

“Those bonds should be trading on a risk-off basis,” the source noted.

NIO paper gains

NIO’s 3.875% convertible notes due 2029 traded over 5 points higher early Monday at a print of 99.123 versus an equity price of $8.51, a market source said.

Volume totaled $6 million with the issue the top performer just over an hour into the session.

NIO reported Monday that it entered into a share subscription agreement with CYVN Holdings LLC through its Abu Dhabi-based investment vehicle CYVN Investments RSC Ltd. investing $2.2 billion in cash to subscribe for 294 million new shares of class A stock at a share price of $7.50 in a deal expected to close next week.

The Shanghai-based smart electric vehicle manufacturer previously reported that in July it received a $738.5 million equity investment from CYVN, which also acquired an aggregate $350 million of NIO class A shares from an affiliate of Tencent Holdings Ltd.

Following the latest December investment, CYVN will own around $20.1% of NIO’s stock.

NIO’s common stock was up 4.32% at $8.33 on more than 83 million shares trading over the morning, nearly double the average volume of 46.8 million shares.

Alteryx bonds up

Alteryx’s 1% convertible notes due 2026 traded nearly 7 points better at just under 97 Monday versus an equity price of $47.05, according to a market source.

Overall secondary action was light on $2 million of volume reported.

Alteryx shares declined $1.05, or 2.19%, in early trading to $46.99.

Alteryx reported that it will become a private company after the acquisition by Clearlake and Insight Partners, which is expected to close in the first half of 2024.

Shareholders will receive $48.25 per share in cash for each share of the Irvine, Calif.-based data analytics firm’s class A or class B common stock.

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