Morning Commentary: Alarm.com convertible notes upsized twice, trade up on debut

By Abigail W. Adams

Portland, Me., Jan. 15 – The last new deal of the week hit the secondary space on Friday and, in keeping with the recent trend, skyrocketed on debut.

In a heavily oversubscribed offering, Alarm.com priced an upsized $435 million of five-year convertible notes after the market close on Thursday at par with a coupon of 0% and an initial conversion premium of 47.5%.

Pricing came in line with tightened talk for a fixed coupon of 0% and at the rich end of revised talk for an initial conversion premium of 42.5% to 47.5%, according to a market source.

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

The deal upsized twice. The initial upsize was to $400 million from the initial $350 million.

The offering from the security technology company was heard to be as much as eight times oversubscribed.

The new paper was performing well despite the sell-off in equities early Friday as investors digested the ramifications of the stimulus plan laid out by president-elect Joseph Biden Thursday evening.

The 0% convertible notes traded in a range of 101.625 to 104 early in the session.

The notes were changing hands around 103 on an outright basis with stock off more than 2% shortly before 11 a.m. ET.

Alarm.com’s stock was changing hands at $97.49, a decrease of 2.3%, shortly before 11 a.m. ET.

© 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.