Morning Commentary: Sarepta’s upsized 1.5% notes ‘well received’ in market debut

By Abigail W. Adams

Portland, Me., Nov. 9 – Sarepta Therapeutics Inc.’s newly priced 1.5% convertible notes due 2024 “opened nicely” in their secondary market debut, with early morning trades 2 to 3 points above par, a market source said.

Sarepta priced an upsized deal of $475 million in convertible notes on the tight end of talk after market close on Wednesday with a 1.5% yield and an initial conversion premium of 40%.

Initial talk placed the deal at $375 million in size with a coupon of 1.5% to 2% and an initial conversion premium of 35% to 40%. The greenshoe was also increased to $95 million from $75 million.

The convertibles from the Cambridge, Mass.-based therapeutics company focused on genetic medicines to treat neuromuscular diseases were “well received” in initial trading, even at the tight end of talk, a market source said.

“There’s some momentum in the name. The pipeline is pretty good and there’s real demand for this paper,” a market source said.

The convertibles opened over 3 points better than their par pricing level and were in the 102.75 to 103 range in early morning trades.

Sarepta’s shares were down 1.08% in early trades from Wednesday’s close of $52.44.

Billerica, Mass.-based medical device company Insulet Corp.’s newly priced 1.375% convertibles due 2024 also did well out of the gate, sources said. The notes expanded over 3 points on a dollar-neutral basis, compared to the sell off in the stock in their first day of trading on Wednesday.

Insulet shares were down 0.96% in early trades on Thursday after closing the market at $67.59 Wednesday.

Both the Insulet and Sarepta deals were priced well, contributing to their out-of-the-gate successes, sources said.

© 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.