Morning Commentary: Helix Energy convertibles price cheap; market awaits Supernus offering

By Abigail W. Adams

Portland, Me., March 14 – Wednesday began with the pricing of a new convertible deal with one more expected to price after the market close.

Helix Energy Solutions Group Inc. priced $125 million of five-year convertible notes after the market close on Tuesday with a coupon of 4.125% and an initial conversion premium of 45%.

Pricing came at the cheap end of talk for a coupon of 3.625% to 4.125% and an initial conversion premium of 45% to 50%, according to a market source.

There was a good mix of both hedge and long only accounts involved in the subscription process. “It was both, but it was heavily allocated to fundamentals,” a market source said.

The new 4.125% notes were trading in a range of 101.5 to 102.5 with the stock “moving around quite a bit,” a market source said. “It’s pretty sensitive to stock.” Helix’s stock was down between 4% to 9% early in Wednesday’s session.

Proceeds from the convertible notes will be used, in part, to repurchase the outstanding $60,115,000 of the company’s 3.25% convertible notes due 2032.

Helix announced a put option on the 3.25% notes on Feb. 14, which expires on March 15, Prospect News reported. If the put option is not exercised, Helix may call the remaining amount, according to a company news release.

The 3.25% notes are “close to the end of their life,” a market source said.

A repeat issuer of convertible notes, Helix also has $125 million in 4.25% convertible notes due 2022 outstanding. The 4.25% notes were trading at 95.24 early Wednesday, according to Trace data.

While Helix’s new 4.125% notes make their debut in the secondary market, the primary market is preparing a new deal from Supernus Pharmaceuticals, Inc.

Supernus plans to price $350 million of five-year convertible notes after the market close Wednesday with price talk for a coupon of 0.75% to 1.25% and an initial conversion premium of 32.5% to 37.5%, according to a market source.

With a market cap of $2.185 billion, Supernus’ deal should go well, a market source said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.