Senseonics, GOL Linhas add-on on tap; Repligen looks cheap; Twitter, Illumina active

By Abigail W. Adams

Portland, Me., July 16 – After a week of no deals, the convertibles primary market had three new offerings in the works.

Senseonics Holdings Inc. plans to price $80 million of six-year convertible notes with a coupon of 5.25%, according to a company news release.

Jefferies & Co. is the bookrunner for the Rule 144A offering, according to a market source.

The offering is contingent on the closing of a $25 million common stock offering and the successful completion of a consent solicitation amending a covenant of its 5.25% convertible notes due 2023, which restricts the company from raising additional debt.

GOL Linhas Aereas Inteligentes SA plans to price a $55 million tap of its 3.75% exchangeable notes due 2024 after the market close on Wednesday with price talk for a reoffer price of 118 to 121, according to a market source.

BofA Securities, Morgan Stanley and Evercore ISI are joint global coordinators for the Rule 144A and Regulation S deal.

Repligen Corp. plans to price $250 million of five-year convertible notes after the market close on Tuesday with the deal looking cheap based on underwriters’ assumptions, sources said.

Meanwhile, it was another ho-hum day in the secondary space with trading volume thin and few notable movements among the issues that were active, sources said.

There was about $44 million in reported volume early in the session and $300 million on the tape toward the market close.

Twitter Inc.’s 0.25% convertible notes due 2024 were active although the notes were largely unchanged on a dollar-neutral basis.

Illumina Inc.’s 0.5% convertible notes due 2021 were again among the top volume movers in the secondary space with the notes also largely unchanged.

Repligen eyed

Repligen plans to price $250 million of five-year convertible notes after the market close on Tuesday with price talk for a coupon of 0.375% to 0.875% and an initial conversion premium of 27.5% to 32.5%.

Underwriters were marketing the deal with assumptions of 350 basis points over Libor and a 36% vol., according to a market source.

Sources pegged the deal about 1.15 points cheap using those assumptions.

The new offering looked cheap and is expected to do well, especially given the shortage of supply in the secondary space, a market source said.

The convertible notes offering is pricing concurrently with a $100 million common stock offering, which sources pointed to as a plus for the convertible notes.

Books on Repligen’s new offering closed in the early afternoon, which was an indication of strong demand, a market source said.

Repligen is a known name in the convertibles universe with its previous issue a strong performer.

The Waltham, Mass-based bioprocessing company intends to enter into privately negotiated exchange transactions with holders of its 2.125% notes due 2021 to exchange a portion of the notes for a combination of cash and shares.

The company intends to call the remaining 2.125% notes at the closing of the offering.

There is about $115 million outstanding in the 2.125% notes, which are deep in the money. The 2.125% notes were last seen trading around 270, according to Trace data.

Twitter active

Twitter’s 0.25% convertible notes due 2024 were active on Tuesday although the majority of activity came pre-market with trading of the notes trailing off into the afternoon, a source said.

The 0.25% notes were moving in line with stock and were little changed on a dollar-neutral basis.

They were seen changing hands at 101.375 versus an equity price of $38.39.

The notes saw more than $10 million in reported volume.

While Twitter’s stock was up more than 2% on Monday, it was giving back some of its gains early in Tuesday’s session.

Twitter stock closed Tuesday at $37.99, a decrease of 1.78%.

There was no apparent reason for the movement in the stock, a source said.

The social media platform is scheduled to report earnings on July 26.

More Illumina

Illumina’s 0.5% convertible notes due 2021 were again major volume movers in the secondary space with some large trades on the tape.

The 0.5% notes were also largely unchanged in the active trading.

The 0.5% notes were changing hands at 133.625 versus a stock price of $302.56 in the mid-afternoon.

More than $16 million of the bonds were on the tape late in the session.

Illumina stock traded to a high of $306 and a low of $301.46 before closing the day at $302.42, an increase of 0.04%.

The notes have been active since last Friday when Illumina slashed its full-year guidance and released second-quarter revenue figures that missed analyst expectations.

Mentioned in this article:

GOL Linhas Aereas Inteligentes SA NYSE: GOL

Illumina Inc. Nasdaq: ILMN

Repligen Corp. Nasdaq: RGEN

Senseonics Holdings Inc. NYSE: SENS

Twitter Inc. NYSE: TWTR

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