Alarm.com upsizes, tightens talk; Repay skyrockets on debut; Nio active; Vail gains

By Abigail W. Adams

Portland, Me., Jan. 14 – New convertibles paper remained in focus on Thursday with one deal set to price after the market close and one more making its aftermarket debut.

Alarm.com’s offering of five-year convertible notes was in demand during bookbuilding with the offering upsized and talk tightened.

Meanwhile, Repay Holdings Corp.’s newly priced convertible notes were in focus in the secondary space with the notes skyrocketing on debut.

Nio Inc.’s newly priced convertible notes remained active with the notes coming in on an outright basis. However, they were largely unchanged on a dollar-neutral, or hedged, basis.

Outside of recent issues, Vail Resorts Inc.’s 0% convertible notes due 2026 hit their highest outright price and expanded dollar-neutral with stock on the rise following an analyst upgrade.

Alarm.com in focus

Alarm.com’s offering of five-year convertible notes was heavily oversubscribed with the deal upsizing and talk tightening.

The security technology company plans to price an upsized $400 million, from $350 million, of five-year convertible notes after the market close on Thursday with talk tightened to a fixed coupon of 0% and an initial conversion premium of 42.5% to 47.5%, according to a market source.

Initial price talk was for a coupon of 0% to 0.5% and an initial conversion premium of 37.5% to 42.5%.

The deal was heard to be as much as 8x oversubscribed, a source said.

The deal was heard to be in the market with assumptions of 300 basis points over Libor and a 40% vol.

Using those assumptions, the deal looked 2.96 points cheap at the midpoint of initial talk, sources said.

While the repricing took most of the cheapness out of the deal, it is expected to perform well in the aftermarket, a source said.

Repay surges upward

Repay priced an upsized $400 million, from $350 million, of five-year convertible notes after the market close on Wednesday at par with a 0% coupon and an initial conversion premium of 40%.

Pricing came at the rich end of initial price talk for a coupon of 0% to 0.5% and richer than initial talk for an initial conversion premium of 30% to 35%.

The new paper skyrocketed on debut.

The notes were changing hands at 105 bid, 105.5 offered early in the session, according to a market source.

They continued to trade on a 105-handle into the afternoon with stock unchanged.

The notes expanded upwards of 5 points dollar-neutral, sources said.

However, there were not that many swap trades on the tape.

Repay’s stock traded to a high of $26.00 and a low of $24.50 before closing the day at $24.76, an increase of 0.081%.

Nio in demand

Nio’s two tranches of convertible notes remained active on Thursday with the notes coming in on an outright basis alongside stock.

However, the notes were largely unchanged dollar-neutral.

The 0% convertible notes due 2026 and 0.5% convertible notes due 2027 both traded down to 104 early in Thursday’s session, a source said.

The notes were largely moving inline dollar-neutral.

Nio’s stock traded to a high of $63.23 and a low of $60.04 before closing the day at $60.87, a decrease of 2.09%.

Nio’s newly priced convertible notes also skyrocketed on their aftermarket debut on Wednesday with both tranches trading up to a 105-handle and expanding 4 to 4.5 points dollar-neutral.

Vail improves

Vail Resorts’ 0% convertible notes due 2026 hit their highest outright level and expanded dollar-neutral on Thursday with stock on the rise following an analyst upgrade.

The 0% convertible notes traded up to 105, the highest outright level for the notes since they priced in mid-December.

They expanded 0.5 point dollar-neutral, a source said.

Vail Resorts’ stock traded to a high of $294.25 and a low of $286.53 before closing the day at $289.18, an increase of 1.71%.

Mentioned in this article:

Alarm.com Nasdaq: ALRM

Nio Inc. NYSE: NIO

Repay Holdings Corp. Nasdaq: RPAY

Vail Resorts Inc. NYSE: MTN

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