BlackBerry convertibles on deck; Glaukos eyed; Plug Power higher; Winnebago active

By Abigail W. Adams

Portland, Me., Jan. 23 – The convertibles primary market returned to action on Tuesday with one deal joining the calendar.

BlackBerry Ltd. plans to price $160 million of five-year convertible notes after the market close on Wednesday with price talk for a coupon of 2.75% to 3.25% and an initial conversion premium of 30% to 35%, according to a market source.

Morgan Stanley & Co. LLC is sole bookrunner for the Rule 144A offering, which carries a greenshoe of $25 million.

The deal joins BrightSpring Health Services Inc.’s $400 million offering of $50-par three-year tangible equity units, which are pricing post-close on Thursday alongside the company’s IPO.

Meanwhile, a quiet morning gave way to a relatively active session in the convertibles secondary space with topical and earnings-related news sparking large price movements on a muted day for equity markets.

Equity indexes were either side of unchanged on Tuesday as earnings kick into high gear with the Dow Jones industrial average closing the day down 96 points, or 0.25%, the S&P 500 index closing up 0.29%, the Nasdaq Composite index closing up 0.43% and the Russell 2000 index closing down 0.36%.

There was $61 million in reported volume about one hour into the session and $411 million on the tape in the late afternoon with some off-the-run issues center stage.

Glaukos Corp.’s 2.75% convertible notes due 2027, a small, illiquid issue that rarely trades in volume, was the most actively traded issue of the session after a more than 15% run up in stock over the past two weeks.

Plug Power Inc.’s 3.75% convertible notes due 2025 were major gainers on Tuesday with the notes shooting up double digits after the company announced that it was close to receiving new funding from the Department of Energy during a business update.

Winnebago Industries Inc.’s recently priced 3.25% convertible notes due 2030 remained active with the notes continuing to notch outright gains.

Glaukos in focus

Glaukos’ 2.75% convertible notes due 2027 were in focus on Tuesday with the small, illiquid issue seeing heavy volume after a two-week bull run in stock.

The notes, which have not traded since December 2023, were changing hands at 173.75 versus a stock price of $91.35 in the late afternoon, according to a market source.

There was $21 million in reported volume.

The medical technology and pharmaceutical company’s stock traded to a high of $93.55 and a low of $89.13 before closing at $92.56, down 0.72%.

While lower on Tuesday, Glaukos’ stock has risen about 17% since early January with the company’s preliminary earnings bolstering the bull run in stock.

The company announced alongside its participation in the JPMorgan Healthcare Conference 2023 revenue figures and 2024 guidance, both of which bested expectations.

Glaukos’ revenue for 2023 is expected to be $313 million versus the $309 million expected.

Revenue expectations for 2024 are $350 million to $360 million.

Plug Power gains

Plug Power’s 3.75% convertible notes due 2025 were major gainers on Tuesday after the company announced a new loan facility with the Department of Energy.

The 3.75% convertible notes shot up more than 10 points outright with stock up more than 30%.

They were trading at 88.375 versus a stock price of $3.43 in the late afternoon, according to a market source.

There was $13 million in reported volume.

Plug’s stock traded to a high of $3.82 and a low of $3.12 before closing at $3.72, an increase of 30.99%.

Stock leapt after the company announced during a conference call that it was zeroing in on a new $1.6 billion loan facility from the Department of Energy.

While a huge move to the upside on Tuesday, stock is still down more than 20% on the month.

News the company was issuing up to $1 billion of common stock in an “at the market” follow-on offering sparked heavy selling in the company’s stock.

Winnebago moves

Winnebago’s recently priced 3.25% convertible notes due 2030 remained active on Tuesday with the notes continuing to shoot higher on an outright basis.

The notes added another 1.5 points outright with stock up about 2% early in the session but gave back some outright gains alongside stock as the session progressed.

The convertibles were changing hands at 105.25 versus a stock price of $70.54 in early trade, according to a market source.

They were seen at 104.125 versus a stock price of $68.91 in the late afternoon.

The notes were largely moving in line dollar-neutral, a source said.

There was $9 million in reported volume.

Winnebago’s stock traded to a low of $68.75 and a high of $70.85 before closing at $68.92, up 0.51%.

Mentioned in this article:

BlackBerry Ltd. NYSE: BB

Glaukos Corp. NYSE: GKOS

Plug Power Inc. Nasdaq: PLUG

Winnebago Industries Inc. NYSE: WGO

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