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Morning Commentary: DigitalOcean 0% convertibles trade up on break; Veritone on tap
By Rebecca Melvin
Concord, N.H., Nov. 16 – DigitalOcean Inc.’s newly priced 0% convertibles due 2026 traded up in the early going on Tuesday after the cloud infrastructure provider priced an upsized $1.3 billion of senior notes with a 0% coupon and 50% initial conversion premium, according to market sources.
The new DigitalOcean notes were heard trading in the early going at 102 bid, 102.5 offered versus an underlying stock price of $119.01. Shares of the New York-based company were last up to $127.44, which is a gain of 7% on the day.
Initially the DigitalOcean deal was talked at $900 million in size.
Marathon Digital Holdings, Inc.’s newly priced 1% convertible senior notes due 2026 were not yet heard in trade after the cryptocurrency company priced an upsized $650 million of notes with an initial conversion premium of 37.5%.
Marathon shares were little changed on the day at $55.43 last.
Also in the market early Tuesday was a new offering from Veritone Inc., a Denver-based enterprise AI platform. The company announced that it intends to sell $150 million five-year convertible senior notes with a $22.5 million greenshoe.
The notes, which were expected to price on Wednesday, were being talked at a yield of 1.5% to 2% and an initial conversion premium of 27.5% to 32.5%.
The primary market activity represents a continuation of a busy Monday when four issuers launched new deals for a total of $4.1 billion in new paper.
One market source said that it was anticipated to be a busy week.
In addition to DigitalOcean and Marathon Digital, NCL Corp. Ltd., a subsidiary of Norwegian Cruise Line Holdings Ltd., is on tap with an $800 million new offering and Unity Software Inc. also joined the calendar with a $1.5 billion debut convertible deal.
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