LendingTree convertible offering oversubscribed; OPKO Health skyrockets; Coupa active

By Abigail W. Adams

Portland, Me., July 21 – While the convertibles primary market has slowed its pace in the first few weeks of the third quarter, the new deal activity continues with one offering set to price after the market close.

LendingTree Inc. plans to price $500 million of five-year convertible notes.

The deal looked cheap based on underwriters’ assumptions and was well oversubscribed, sources said.

Meanwhile, there was an uptick of activity in the secondary space after a sleepy start to the week with $97 million in reported volume about one hour into Tuesday’s session and almost $500 million about one hour before the market close.

Coupa Software Inc.’s 0.375% convertible notes due 2026 were active early in the session with the notes trading down on an outright basis alongside stock.

OPKO Health Inc.’s 4.5% convertible notes due 2025 skyrocketed on an outright and dollar-neutral basis following news the company will handle Covid-19 testing for the NFL.

Lending Tree eyed

LendingTree plans to price $500 million of five-year convertible notes after the market close on Tuesday with price talk for a coupon of 0.25% to 0.75% and an initial conversion premium of 27.5% to 32.5%.

The deal was heard to be marketed with assumptions of 500 basis points over Libor and a 40% vol., which modeled 2.5 points cheap at the midpoint of talk, sources said.

The offering was a welcome addition to the convertible universe, and the pricing was appropriate, a source said.

With proceeds to be used, in part, to repurchase a portion of the company’s outstanding 0.625% convertible notes due 2022 in privately negotiated transactions, the deal was expected to do well during bookbuilding.

The offering was well oversubscribed, a source said.

LendingTree’s 0.625% notes changed hands on Monday at 173.625, according to Trace data.

The online loan marketplace priced a $300 million issue of the 0.625% notes in May 2017.

Coupa active

Coupa Software’s 0.375% convertible notes due 2026 were active on Tuesday with the notes trading down on an outright basis alongside stock.

The 0.375% notes were down more than 3 points outright to 124.875 with stock off about 3% early in the session, according to a market source.

They improved alongside stock as the session progressed and were later seen changing hands just shy of 126.

The notes saw about $14 million in reported volume.

Coupa stock traded as low as $301.03 shortly after the opening bell. However, it improved to trade as high as $317.71 before closing the day at $309.49, a decrease of 2.08%.

The business spend management company was trading off alongside the broader tech sector as the Nasdaq composite’s upward momentum faltered on Tuesday.

While the Dow Jones industrial average and the S&P 500 closed the day with gains, the Nasdaq composite closed Tuesday down 86 points, or 0.81%.

The company was also the subject of a recent article that appeared in Forbes, which stated the company’s stock had largely run its course after a 172% rise from its lows in March.

OPKO skyrockets

OPKO Health’s 4.5% convertible notes due 2025 skyrocketed on an outright and dollar-neutral basis on Tuesday.

The notes were up more than 30 points outright as stock surged more than 20%.

They traded up to 165.5, their highest outright level since pricing in February.

The notes expanded 5 points dollar-neutral during Tuesday’s session alone, a source said.

The notes, which are typically a small, illiquid issue, were active with more than $6 million in reported volume.

OPKO Health stock traded as high as $6.47 and as low as $5.30 before closing the day at $5.96, an increase of 20.55%.

Stock soared on Tuesday after the company’s BioReference Lab unit was awarded a contract to screen NFL teams for Covid-19.

OPKO’s convertible notes and stock have been on a tear over the past few months with the medical test and medication company a provider of Covid-19 tests.

OPKO stock hit its 52-week low of $1.12 and the convertible notes traded as low as 65 in the March sell-off, sources said.

Mentioned in this article:

Coupa Software Inc. Nasdaq: COUP

LendingTree Inc. Nasdaq: TREE

OPKO Health Inc. Nasdaq: OPK

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