Infinera, Enphase, NanoString Technologies, BridgeBio convertible note offerings eyed

By Abigail W. Adams

Portland, Me., March 4 – The convertibles primary market opened its floodgates on Wednesday with four overnight deals launching prior to the market open as equities staged a rebound on the heels of Super Tuesday election results.

BridgeBio Pharma Inc., NanoString Technologies Inc., Enphase Energy Inc. and Infinera Corp. are all in the market with offerings that were slated to price after the market close on Wednesday.

The deals were in demand during bookbuilding with BridgeBio and NanoString both upsizing their offerings, sources said.

Meanwhile, it was an active day in the secondary space as markets firmed.

Square Inc.’s newly priced 0.125% convertible notes due 2025 gained on an outright and dollar-neutral basis in active trading on their second day in the secondary space.

BridgeBio in demand

BridgeBio Pharma’s offering of seven-year convertible notes was in demand during bookbuilding with the deal upsizing to $475 million and the greenshoe upsizing to $75 million, a market source said.

The deal was heard to be pricing at the midpoint of talk with a coupon of 2.5% and an initial conversion premium of 37.5%.

Price talk was for a coupon of 2.25% to 2.75% and an initial conversion premium of 35% to 40%.

The initial size of the deal was $350 million with a greenshoe of $52.5 million.

The deal was heard to be marketed with assumptions of 650 basis points over Libor and a 40% vol.

Using those assumptions, the deal modeled about 1.34 points cheap at the midpoint of talk, a market source said.

Another source saw the deal a little over 3 points cheap at the mids.

BridgeBio is unique for a biotech company given the amount of products in its pipeline, a market source said.

The biotech company has products in the later stage of clinical trials and also in the early stage of development, as opposed to other pharmaceutical companies that have a much more binary profile.

“In biotech, if the clinical data is not positive, the convert trades off. It’s a niche type play. This is something rare from that perspective,” the source said.

The multiple drugs the company has in development, “gives investors some comfort. They aren’t looking at it with a binary risk lens,” the source said.

The deal was met with strong demand, and books closed in the early afternoon.

NanoString upsizes

NanoString Technologies was also in demand during bookbuilding with the company upsizing its planned offering of five-year convertible notes to $200 million, according to a market source.

The initial size of the deal was $175 million.

The deal was heard to be pricing at the midpoint of price talk.

Price talk was for a coupon of 2.375% to 2.875% and an initial conversion premium of 37.5% to 42.5%, sources said.

Underwriters were marketing the deal with assumptions of 650 bps over Libor and a 42% vol.

Using those assumptions, the deal modeled about 3.29 points cheap at the midpoint of talk, sources said.

Enphase Energy eyed

Enphase Energy plans to sell $320 million of five-year convertible notes after the market close on Wednesday with price talk for a coupon of 0% to 0.5% and an initial conversion premium 50% to 55%, according to a market source.

Using assumptions of 325 bps over Libor and a 45% vol., the deal looked about 0.33 point cheap at the midpoint of talk, a source said.

Another source pegged the deal about 0.5 point cheap at the mids.

The deal was believed to be coming at the cheap end of talk, a source said.

While the deal modeled up to 2 points cheap at the cheap end of talk, some sources were not enthusiastic about the offering.

The solar energy sector has been a disappointment in the past, a market source said.

Other sources also took issue with the premium range.

Enphase Energy stock has gained more than 500% over the past year and is close to its 52-week high, which it set just two weeks ago, a source said.

Infinera looks cheap

Infinera plans to price $200 million of seven-year convertible notes after the market close on Wednesday with price talk for a coupon of 2% to 2.5% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

Using assumptions of 750 bps over Libor and a 40% vol., the deal looked about 1.69 points cheap at the midpoint of talk, a source said.

Other sources saw the deal almost 2 points cheap.

The new offering sparked activity in Infinera’s 2.125% notes due 2024, which were trading off alongside stock.

The notes dropped almost 7 points outright to close Wednesday at 95.5, according to a market source.

Infinera stock closed Wednesday at $5.89, a decrease of 16.81%.

Square improves

After a volatile market debut, Square’s 0.125% convertible notes due 2025 were gaining on an outright and dollar-neutral basis on Wednesday.

The notes gained about 1 point outright to top par during Wednesday’s session.

They were trading around 100.125 in the late afternoon with stock off slightly, according to a market source

The notes saw more than $43 million in reported volume.

Square stock traded to a low of $75.82 and a high of $79.49 before closing the day at $79.26, an increase of 0.58%.

Mentioned in this article:

BridgeBio Pharma Inc. Nasdaq: BBIO

Enphase Energy Inc. Nasdaq: ENPH

Infinera Corp. Nasdaq: INFN

NanoString Technologies Inc. Nasdaq: NSTG

Square Inc. NYSE: SQ

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.