Boston Scientific on tap; Cryoport, Becton Dickinson in focus; new deals trade higher

By Abigail W. Adams

Portland, Me., May 20 – New deals remained the focus of the convertibles universe on Wednesday with one deal on deck for Thursday, two new deals set to price after the market close on Wednesday and four new deals making their aftermarket debut.

Boston Scientific Corp. plans to price $750 million of $100-par three-year series A mandatory convertible preferred stock after the market close on Thursday with price talk for a dividend of 5.25% to 5.75% and a threshold appreciation premium of 17.5% to 22.5%, according to a market source.

J.P. Morgan Securities LLC and BofA Securities Inc. are joint bookrunners for the registered offering, which carries a greenshoe of $112.5 million.

Becton, Dickinson and Co. plans to price $1.5 billion of $50-par depositary shares representing a 1/20th interest in its $1,000-par three-year series B mandatory convertible preferred stock, and Cryoport, Inc. plans to price $100 million of five-year convertible notes after the market close on Wednesday.

Becton Dickinson’s offering looked cheap based on underwriters’ assumptions, a market source said.

Sea Ltd. priced $1 billion of long five-year convertible notes, RealPage, Inc. priced $300 million of five-year convertible notes, Model N Inc. sold $150 million of five-year convertible notes, and Tricida Inc. priced $175 million of seven-year convertible notes after the market close on Tuesday.

The new paper dominated trading activity in the secondary space with reported volume surpassing $1.3 billion by the market close.

The new paper made its aftermarket debut on a strong day for equities, and each deal was performing well, sources said.

Becton eyed

Becton Dickinson plans to price $1.5 billion of $50-par depositary shares representing a 1/20th interest in its $1,000-par three-year series B mandatory convertible preferred stock after the market close on Wednesday with price talk for a dividend of 6% to 6.5% and an initial conversion premium of 17.5% to 22.5%, according to a market source.

The deal was heard to be in the market with assumptions of 175 basis points over Libor and a 24% to 26% vol., according to a market source.

Using those assumptions, the deal looked almost 3 points cheap at the midpoint of talk.

Becton is a well-known name in the convertibles universe.

The deal was in strong demand during bookbuilding and is expected to trade well in the secondary, sources said.

Cryoport on deck

Cryoport plans to sell $100 million of five-year convertible notes after the market close on Wednesday with price talk for a coupon of 2.75% and an initial conversion premium of 15%, according to market sources.

Jefferies LLC and SVB Leerink LLC are bookrunners for the Rule 144A offering, which carries a greenshoe of $15 million.

The small offering was not on the radar of sources queried.

Sea dominates

Sea priced $1 billion of long five-year convertible notes after the market close on Tuesday at par at the midpoint of talk with a coupon of 2.375% and an initial conversion premium of 32.5%.

Price talk was for a coupon of 2.125% to 2.625% and an initial conversion premium of 30% to 35%, according to a market source.

The 2.375% notes dominated activity in the secondary space with the notes jumping on an outright basis as stock soared.

The 2.375% notes traded up to a 106-handle early Wednesday with the company’s equity up more than 6%, according to a market source.

They were changing hands around 105.75 in the late afternoon.

The notes saw more than $87 million in reported volume about one hour into the session and $165 million heading into the market close.

The Singapore-based consumer internet company’s 1% convertible notes due 2024 were also active with the notes up almost 7 points outright to trade at 153.5 in the late afternoon.

The 1% notes had about $23 million in reported volume by the late afternoon.

Sea’s American Depositary Shares traded to a low of $69.90 and a high of $73.97 before closing the day at $72.40, an increase of 6.16%.

Concurrently with the convertible notes offering, the company entered into separately negotiated transactions to exchange $150 million of the principal amount of its 2.25% convertible notes due 2023 for $50 million in cash plus unpaid interest and 6.9 million ADS.

RealPage expands

RealPage priced $300 million of five-year convertible notes after the market close on Tuesday at par at the midpoint of talk with a coupon of 1.5% and an initial conversion premium of 30%.

Price talk was for a coupon of 1.25% to 1.75% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

Concurrently, the company priced a secondary offering of 5,084,746 shares of common stock at $59.00 per share.

The 1.5% notes were also posting gains on an outright basis as stock traded well above the reoffer price in the secondary offering.

The 1.5% notes were changing hands at 104.25 early in the session. They rose to 105.125 in the late afternoon.

The notes saw more than $114 million in reported volume by the late afternoon.

The notes were expanded about 2.5 points dollar-neutral, a market source said.

RealPage stock traded to a low of $60.80 and a high of $64.07 before closing the day at $63.32, an increase of 2.71%.

Model N trades up

Model N priced $150 million of five-year convertible notes after the market close on Tuesday at par at the cheap end of talk with a coupon of 2.625% and an initial conversion premium of 27.5%.

Price talk was for a coupon of 2.125% to 2.625% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

The new 2.625% notes were seen changing hands at 102.5 in the late afternoon.

There was more than $30 million on the tape heading into the market close.

Model N stock traded to a low of $25.80 and a high of $27.88 before closing the day at $27.77, an increase of 6.24%.

Tricida prices cheap

Tricida brought $175 million of seven-year convertible notes after the market close on Tuesday at the cheap end of talk at par with a coupon of 3.5% and an initial conversion premium of 25%.

Price talk was for a coupon of 3% to 3.5% and an initial conversion premium of 25% to 30%, according to a market source.

The 3.5% notes were also posting gains on an outright basis in active trading. The notes were changing hands at 102.25 with stock up about 2% early in the session.

However, they came in alongside stock as the session progressed.

They were changing hands at 100.5 heading into the market close, according to a market source.

The bonds saw more than $20 million in reported volume.

Tricida stock traded to a low of $26.55 and a high of $27.44 before closing the day at $26.59, an increase of 0.038%.

Mentioned in this article:

Becton, Dickinson and Co. NYSE: BDX

Boston Scientific Corp. NYSE: BSX

Cryoport, Inc. Nasdaq: CYRX

Model N Inc. NYSE: MODN

RealPage, Inc. Nasdaq: RP

Sea Ltd. NYSE: SE

Tricida Inc. Nasdaq: TCDA

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