Morning Commentary: Progress Software eyed; Ionis, Li Auto price

By Abigail W. Adams

Portland, Me., April 8 – New paper remained in focus on Thursday with one $300 million offering set to price after the market close and $1.3 billion in two deals making their aftermarket debuts.

Progress Software Corp. plans to price $300 million five-year convertible notes after the market close on Thursday.

The deal looked cheap based on underwriters’ assumptions and had optically attractive terms, sources said.

As market players eyed the new deals in the works, new paper from Li Auto Inc. and Ionis Pharmaceuticals Inc. made their aftermarket debuts.

Ionis’ new notes were putting in a strong performance on an outright and dollar-neutral basis.

Progress Software eyed

Progress Software plans to price $300 million five-year convertible notes after the market close on Thursday with price talk for a coupon of 0.75% to 1.25% and an initial conversion premium of 25% to 30%, according to a market source.

The deal was heard to be in the market with assumptions of 300 bps over Libor and a 33% vol., a market source said.

Using those assumptions, the deal looked 3.08 points cheap at the midpoint of talk.

Li Auto

Li Auto priced $750 million in seven-year convertible notes after the market close on Wednesday at par with a coupon of 0.25% and an initial conversion premium of 27.5%.

Pricing came at the midpoint of talk for a coupon of 0% to 0.5% and at the cheap end of talk for an initial conversion premium of 27.5% to 32.5%, according to a market source.

Ionis

Ionis Pharmaceuticals priced an upsized $550 million of five-year convertible notes after the market close on Wednesday at par with a coupon of 0% and an initial conversion premium of 32.5%.

Pricing came in line with price talk for a fixed coupon of 0% and at the midpoint of talk for an initial conversion premium of 30% to 35%, according to a market source.

The new paper was putting in a strong performance on an outright and dollar-neutral basis.

It traded to a high of 102 with most prints between 101.25 and 102 with stock off early in the session, a source said.

Ionis stock was changing hands at $43.39, a decrease of 0.62%, shortly before 11 a.m. ET.

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