Morning Commentary: Amyris, Cryoport convertible notes offerings eyed in early activity

By Abigail W. Adams

Portland, Me., Nov. 9 – The convertibles primary market continued to roll out new offerings with two deals totaling $700 million set to price after the market close.

In the latest refinancing deal, Cryoport Inc. plans to price $300 million of five-year convertible notes with proceeds to be used to repurchase a portion of the company’s 3% convertible notes due 2025.

Amyris Inc. is also on deck with a $400 million offering of five-year convertible notes.

While Cryoport modeled slightly cheap based on underwriters’ assumptions, Amyris looked several points cheap.

Cryoport on tap

Cryoport plans to price $300 million of five-year convertible notes after the market close on Tuesday with price talk for a coupon of 0.75% to 1.25% and an initial conversion premium of 40% to 45%.

The deal was heard to be in the market with assumptions of 400 basis points over Libor and a 40% vol., according to a market source.

Using those assumptions, the deal looked 0.62 point cheap at the midpoint of talk.

The deal is pricing concurrently with a secondary offering.

Proceeds from the convertible notes offering will be used to repurchase a portion of the company’s 3% convertible notes due 2025 in privately negotiated transactions.

The 3% convertible notes are deep-in-the-money and trade at triple par.

Amyris in focus

Amyris plans to price $400 million of five-year convertible notes after the market close on Tuesday with 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 550 bps over Libor and a 40% vol., according to a market source.

Using those assumptions, the deal looked 3.15 points cheap at the midpoint of talk.

While the biotech company has priced convertible notes in the past, they have been more akin to structured financing than standard convertible issuance.

The company is a dramatically different company than it was just a few months ago, a source said.

Stock has skyrocketed more than 500% in the past year.

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