Morning Commentary: Impinj convertibles price; Ionis active after exchange; Lumentum up

By Abigail W. Adams

Portland, Me., Dec. 12 –More new paper entered the convertibles universe on Thursday with one new deal and one exchange offer pricing.

Impinj Inc. priced $75 million of seven-year convertible notes after the market close on Wednesday.

Trading volume was light in the small issue. However, the trades that were seen on the tape were around par, a market source said.

Ionis Pharmaceuticals, Inc.’s 1% convertible notes due 2021 saw renewed attention in the secondary space after the company announced a privately negotiated exchange for new 0.125% convertible notes due 2024.

Lumentum Holdings Inc.’s convertible notes remained the major volume movers in the secondary space with both the new 0.5% convertible notes due 2026 and the 0.25% convertible notes due 2024 continuing to improve.

Impinj prices

Impinj priced $75 million of seven-year convertible notes after the market close on Wednesday at the cheap end of talk at par with a coupon of 2% and an initial conversion premium of 27.5%.

Price talk was for a coupon of 1.5% to 2% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

While the deal modeled cheap based on underwriters’ assumptions, it was a club deal, sources said.

The small issue was most likely socked away and sources did not expect it to trade much.

However, there was some activity on the tape early in the session.

There were two $2 million plus prints and some smaller trades on the tape, a market source said.

The notes were trading in a range of 99 to 100.375. “Seems like some flippers,” the source said.

Impinj stock was $26.98, a decrease of 0.44%, shortly before 11 a.m. ET.

Ionis’ exchange

Ionis’ 1% convertible notes due 2021 saw renewed attention in the secondary space following news the company exchanged a portion of the principal amount for new 0.125% convertible notes due 2024.

The 1% convertible notes were changing hands around 115.375 versus a stock price of $61.09, a source said.

There was about $3 million in reported volume.

Ionis announced an exchange for the 1% notes prior to the market open.

The pharmaceutical company will issue $398 million of new 0.125% convertible notes due 2024 in exchange for $340.2 million of the 1% notes.

The company will issue an additional $109.5 million of the 0.125% convertible notes for cash, according to the company news release.

Following the exchange, $344.8 million of the 1% notes will remain outstanding, according to the release.

Lumentum improves

Lumentum’s new 0.5% convertible notes due 2026 remained the major volume mover in the secondary space on Thursday with the notes continuing to improve.

The 0.5% notes jumped to 102.125 early in Thursday’s session as stock continued its upward momentum.

The notes accounted for $15 million of the $67 million in reported volume about one hour into Thursday’s session, according to a market source.

Lumentum’s 0.25% convertible notes due 2024 were also active and continuing to firm.

The notes were changing hands at 136.625 early in the session with about $5 million in reported volume.

Lumentum stock traded up to $72.80, an increase of 4.28%, shortly before 11 a.m. ET.

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