STMicroelectronics prices two-tranche new issue; Teladoc moves above par; EnerNOC gains

By Stephanie N. Rotondo

Seattle, June 22 – The convertible bond new issue pipeline was showing no signs of letting up on Thursday as STMicroelectronics NV brought a dual-tranche offering of $1.5 billion five- and seven-year convertibles.

The 0% five-year paper – of which $750 million was sold, same as the seven-year notes – came with a negative 0.25% yield to maturity. The seven-year paper priced at par to yield 0.25%.

Yield talk on the five-year notes was negative 0.5% to 0% and was 0% to 0.5% on the seven-year notes.

Both issues came with an initial conversion premium of 37.5%, right in the middle of the 35% to 40% talk.

“A blast from the past!” one market veteran remarked. “When was the last STM deal?

Actually, it was almost three years ago that the semiconductor manufacturer brought a deal, a $1 billion two-tranche issue of 0% convertible notes due 2019 and 1% convertible notes due 2021. Proceeds from the new issue will be used for an early redemption of the 0% notes, as well as a future redemption of the 1% notes.

“It’s nice to have companies that we know,” the source added.

In the wake of the offering, STMicroelectronics’ New York Stock Exchange-listed stock declined 36 cents, or 2.35%, to $14.99.

Morgan Stanley & Co. LLC and Société Générale CIB are the joint global coordinators and joint bookrunners. Citigroup Global Markets Inc., J.P. Morgan Securities LLC and UniCredit are also acting as joint bookrunners.

As for Teladoc Inc.’s 3% convertible notes due 2022 – a deal priced Wednesday – they were seen trading up to a 104.125 to 104.625 context by the end of the day.

The convertibles were at 102 bid at mid-morning, according to a trader.

The underlying stock was slightly lower in mid-morning trading, but eventually climbed back up, closing higher by 80 cents, or 2.36%, at $34.65.

The $240 million deal was upsized from $200 million and came with an initial conversion premium of 30%. The yield printed at the rich end of the 3% to 3.5% talk and at the midpoint of the 27.5% to 32.5% premium talk.

Jefferies & Co. ran the Rule 144A deal.

EnerNOC jumps on takeover

EnerNOC Inc.’s 2.25% convertible notes due 2019 got a 9 point boost on Thursday after an all-cash takeover by Enel Group was announced.

A New York-based trader placed the convertibles at 99.5, adding that paper had been shopped around a few days prior at 90.5.

At that time, however, there were no takers, he said.

As for the company’s stock, it rose $2.25, or 41.67%, to $7.65.

Under the terms of deal, Enel’s Enel Green Power North America Inc. unit will launch a tender offer for EnerNOC’s stock at $7.67 per share.

That amounted to a 42% premium over the June 21 closing share price and a 38% premium over the 30-day volume-weighted average price.

The deal is contingent upon a majority of holders tendering their shares, as well as federal regulatory approvals.

Assuming all goes well, the deal is expected to close in the third quarter of 2017.

EnerNOC is a Boston-based provider of energy intelligence software and services.

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