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Morning Commentary: Live Nation convertibles offering reactivates primary; demand heavy
By Abigail W. Adams
Portland, Me., Jan. 9 – The convertibles primary market returned to action on Monday with the first new deal of the year.
Live Nation Entertainment Inc. plans to price $850 million of six-year convertible notes after the market close on Monday with price talk for a coupon of 3.25% to 3.75% and an initial conversion premium of 45% to 50%, according to a market source.
The deal was heard to be in the market with assumptions of a credit spread of 375 basis points and a 38% vol., according to a market source.
The offering looked attractive and played to heavy demand with the deal covered shortly after the conclusion of the investors’ call, sources said.
Books were heard to be closing at noon ET.
The deal continued the wave of refinancings that drove new deal activity in the second half of 2022.
Proceeds will be used, in part, to repurchase for cash a portion of the company’s 2.5% convertible notes due March 15, 2023.
Refinancings continued to be the trade of the day although convertible issuers were seeking alternatives to the convertibles market to address looming maturities.
Bilibili Inc. was in focus in the secondary space after the Shanghai-based video sharing website announced a secondary offering as part of an exchange agreement for its 0.5% convertible notes due 2026.
Bilibili plans to price 15.34 million American Depositary Shares as part of an exchange agreement with Goldman Sachs (Asia) LLC for $384.8 million of its 0.5% convertible notes, the company said in a press release.
The 0.5% convertible notes saw heavy volume in the secondary market with several pre-market prints at 86, which appeared to be their buyback price, a source said.
There was $21 million in reported volume.
The notes closed last Friday on a 79-handle.
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