NICE, Liberty Broadband provide early start to convertibles primary in Aug. 24 week

Chicago, Aug. 24 – The convertibles primary calendar started the week with a blank slate; however, early on Monday two new convertible bond issues were announced.

NICE Ltd., a Hoboken, N.J.-based software company, proposed a $400 million offering of five-year convertible notes.

And, Liberty Broadband Corp. announced a planned offering of senior debentures exchangeable into Charter Communications, Inc., a company Liberty has an interest in.

NICE offering

While terms were not yet available at press time, NICE’s 0% convertibles notes were planned with talk for an initial conversion premium of 30% to 35%.

The deal was modeling with assumptions of 225 basis points over Libor and a 30% vol., according to a market source.

Under those assumptions, the fair value of the deal modeled out to 101.5 at the midpoint of talk.

The notes are tied to the American Depositary Shares of the issuer, which closed at $225.37 on Friday.

The ADSs started the morning strong after the market open, reaching a very brief high of $226.17, but ultimately closed the day down negative 3.45% at $217.59.

Terms often become available overnight or late in the evening for offerings which price after market close.

The company was last in the debt markets with an issue of $250 million exchangeable notes due 2024 that yielded 1.25% with an initial exchange premium of 22.5%. That issue priced in January 2017.

The international company has a market cap of $13.65 billion with 40 office locations, including Ra’anana, Israel.

Liberty into Charter

Liberty Broadband entered the primary market with a proposed offering of $450 million of exchangeable notes, exchangeable into the stock of Charter Communications.

Charter shares closed at $613.96 on Friday, near the company’s 52-week high of $617.30.

Charter closed Monday slightly lower at $612.53.

Liberty Broadband and GCI Liberty announced a stock-for-stock merger earlier this month.

Liberty has an interest in Charter, and GCI has a non-controlling interest, pre-merger.

GCI Liberty sold 1.75% exchangeable notes tied to Charter Communications in June 2018.

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