Morning Commentary: GoPro prices upsized issue in line with talk; Prospect Capital active

By Stephanie N. Rotondo

Seattle, April 7 – The convertible bond market got another new issue on Friday, as GoPro Inc. priced its previously announced Rule 144A offering of convertible senior notes due 2022.

The company sold an upsized $175 million of the notes at par to yield 3.5% with an initial conversion premium of 25%.

The deal came in line with price talk but upsized from $150 million.

J.P. Morgan Securities LLC ran the books.

In early dealings, a trader said he saw the issue printing just a couple times in a 98 to 98.5 context, though he saw offers for the paper at 102.

“I’m sure they stopped printing for some technical reason,” he said, such as incorrect information “or something.”

GoPro’s stock (Nasdaq: GPRO) was moving up in the wake of the new deal, rising 7 cents to $8.58.

The initial conversion rate is 94.0071 shares per each $1,000 of notes. That equates to an initial conversion price of $10.64.

From Thursday’s business, Prospect Capital Corp.’s $225 million of 4.95% convertible senior notes due 2022 – which came with an initial conversion premium of 10% – were making up a sizable portion of the day’s volume, according to a trader.

At mid-morning, trading in the issue totaled $33 million, out of $102 million overall, the trader said.

The trader pegged the paper at 98.5 to 98.75.

The stock (Nasdaq: PSEC) ticked up a penny to $9.07.

Conversions will be settled in common stock. The initial conversion rate is 100.2305 shares per each $1,000 of notes, or $9.98 per share.

Goldman Sachs & Co. was the bookrunner.

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