Morning Commentary: Bandwidth convertibles expand on debt; NuVasive offering eyed

By Abigail W. Adams

Portland, Me., Feb. 26 – While the volatility that has rocked equities has largely shut down deal making in other markets, the convertibles primary market has remained active with one new deal pricing before the market open and another slated to price after the close.

NuVasive Inc. joined the forward calendar with plans to price $450 million of five-year convertible notes after the market close on Wednesday.

Price talk is for a coupon of 0.375% to 0.875% and an initial conversion premium of 32.5% to 37.5%, according to a market source.

The deal was heard to be marketed with assumptions of 250 basis points over Libor and a 32% vol., according to a market source.

Using those assumptions, the deal modeled about 1.5 points cheap at the midpoint of talk, a source said.

Bandwidth Inc. priced an upsized $350 million six-year convertible notes after the market close on Tuesday at par with coupon of 0.25% and an initial conversion premium of 32.5%, according to a company news release.

Pricing came at the rich end of talk for a coupon of 0.25% to 0.75% and at the midpoint of talk for an initial conversion premium of 30% to 35%, according to a market source.

The greenshoe was also upsized to $50 million.

The initial size of the deal was $300 million with a greenshoe of $45 million.

The new paper was performing well in the secondary space. The 0.25% notes were wrapped around 101 with stock off early in the session.

Bandwidth stock was $67.75, a decrease of 1.38%, shortly before 11 a.m. ET.

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