Convertible bond primary quiet; LG Chem notes set to trade; BridgeBio Pharma higher

By Cristal Cody

Tupelo, Miss., July 18 – Primary action in the convertible bond market stayed muted over Tuesday’s session as stocks bounced higher on the back of strong earnings results reported from Bank of America Corp. and Morgan Stanley.

Issuance last week and so far this week has been “absolutely zero because all the issuers are still in earnings corporate blackout,” a source reported.

LG Chem Ltd. moved Tuesday to list its new $2 billion two-tranche offering of notes (A3) exchangeable for LG Energy Solution Ltd. shares that priced earlier in the month.

Markets stayed positive over the session with stocks stronger and volatility waning following strong financial earnings results from Bank of America and Morgan Stanley on Tuesday.

The S&P 500 index rose 0.71%, the Nasdaq added 0.76%, the Dow Jones industrial average closed up 1.06% and the Russell 200 index rose 1.27% on the day.

The CBOE Volatility index fell 1.34% by the close to 13.3.

Retail sales disappointed with the Commerce Department reporting retail sales in June edged up by 0.2%, down from the 0.5% increase in May and below the 0.5% increase market analysts expected.

In the secondary market, BridgeBio Pharma, Inc. (Nasdaq: BBIO) shares and paper moved steadily up on Tuesday in a continued rally from Monday, sources reported.

By the close Tuesday, BridgeBio Pharma’s convertible notes had added about 0.75 point to 1 point on more than $31.5 million of secondary volume, one source said.

“The 27s are up 1 point as well,” the source said of the 2.5% tranche.

LG ready to trade

LG Chem’s notes, sold July 11 and issued on Tuesday, includes $1 billion of 1.25% exchangeable bonds due 2028 that will be listed in the bond market starting Wednesday with the short name of “LG Chem b1.25%280718S.”

The tranche of five-year exchangeable notes priced at par to yield 1.25% with an initial exchange premium of 25%.

Price talk was for a coupon of 0.75% to 1.25% and an initial exchange premium of 25% to 35%.

LG Chem’s $1 billion of 1.6% exchangeable bonds due 2030 also will start trading Wednesday with the short name of “LG Chem b1.6%300718S.”

The seven-year exchangeable notes priced at par to yield 1.85% with an initial exchange premium of 30%.

Price talk was for a coupon of 1.35% to 1.85% and an initial exchange premium of 25% to 35%.

The notes are exchangeable at a fixed rate of US$1 to KRW 1,295.

The bonds will be traded in a minimum board lot size of $200,000.

LG Chem is a Seoul, South Korea-based chemical company, and subsidiary LG Energy is a battery company.

BridgeBio Pharma jumps

In the secondary market, BridgeBio Pharma continued to rally over the day after opening the week at nearly double Friday’s closing price, a source said Tuesday.

“Yesterday, you had a large rally in BridgeBio Pharma,” the market source said. “That stock went from $18.22 closed on Friday to trading at $36, so it’s about doubled. Those were very active yesterday and that’s where it’s sitting right now.”

BridgeBio Pharma shares closed Monday at $32.04 and traded early Tuesday in the $32.02 to $36.36 range.

The stock traded with a 13 handle back in May.

BridgeBio Pharma’s 2.25% convertible notes due 2029 were trading about ¾ point better early in the session on a 78 handle and a yield at 6.9%.

The bonds saw heavy secondary action on Monday and shot up about 12 points from Friday’s closing at 63.5 and a 11.29% yield.

By the close Tuesday, BridgeBio Pharma’s convertible notes had rallied about 0.75 point to 1 point on more than $31.5 million of secondary volume, another source said.

“The 27s are up 1 point as well,” a source said of the 2.5% tranche.

BridgeBio Pharma’s 2.5% notes due 2027 went out 1 point higher at 106.946 and a 0.576% yield, while the equity was priced at $32.70.

The bonds were moving on $12.5 million of secondary trading on Tuesday.

The 2.25% notes due 2029 also added nearly 0.75 point to trade at 78.78 and a 6.93% yield on $19 million of paper changing hands on Tuesday.

The equity was quoted at $33.26.

The Palo Alto, Calif.-based biopharmaceutical company on Monday announced positive data from a clinical drug trial and held a conference call and live webcast.

On Tuesday, BridgeBio Pharma also reported that its board compensation committee granted eight new employees restricted stock units.

Mentioned in this article:

BridgeBio Pharma, Inc. Nasdaq: BBIO

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