New Proofpoint looks somewhat cheap; existing Proofpoint comes in small; Ironwood lingers

By Rebecca Melvin

New York, June 11 – Proofpoint Inc.’s planned $150 million of five-year convertibles looked about fair value to somewhat cheap ahead of final terms expected to be fixed late Thursday.

Valuations on the planned Proofpoint deal varied depending on credit spread inputs, which ranged from between 375 basis points over Libor to 450 bps over Libor among players queried, and vol. inputs ranged from 35% to 39%.

Proofpoint’s existing 1.25% convertibles due 2018 came in slightly on the heels of the new deal, slipping by about 0.125 point to 0.25 point, but holding up better than expected, a New York-based sellside analyst said.

Ironwood Pharmaceuticals Inc.’s new 2.25% convertibles, which debuted in the market on Wednesday, saw some follow-on trade after the Cambridge, Mass.-based pharmaceutical company priced $300 million of the seven-year senior notes at the rich end and through the rich end of talk

The Ironwood bonds edged up slightly, quoted at 101.25 bid, 101.75 offered at the close with the underlying shares at $12.45. That compared to late Wednesday when the bonds were closed at 101.25 with the stock at $12.44.

“Ironwood lingers,” a trader said.

The trader pointed to Synergy Pharmaceuticals Inc., which represents a “decent comp” for Ironwood. Synergy shares hit a 52-week high on Thursday and the convertibles continued to trade positively, quoted at the close at 170.625 bid, 171.625 offered.

© 2015 Prospect News.
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