Morning Commentary: Patrick Industries convertibles on tap; Coupa Software notes slip

By Rebecca Melvin

Concord, N.H., Dec. 7 – One deal launched in the convertibles primary market early Tuesday for pricing after the market close, according to a market source.

Patrick Industries Inc. was talking a $225 million seven-year convertible senior note with a 1.75% to 2.25% coupon and a 27.5% to 32.5% initial conversion premium, according to the source.

The Rule 144A deal has a $33.75 million greenshoe. It is non-callable until Dec. 5, 2025 and then provisionally callable subject to a 130% price hurdle.

BofA Securities Inc., Truist Securities Inc. and Wells Fargo Securities LLC are bookrunners of the notes, for which proceeds are expected to be used to pay amounts due under the company’s current credit facility and to pay the cost of convertible note hedge transactions.

The Elkhart, Ind.-based company makes and distributes components for the recreational vehicle, manufactured housing and marine industries.

In the secondary space, two Coupa Software Inc. convertible notes were trading notably in what was a quiet market overall.

The Coupa notes were up initially in tandem with the underlying shares but they slipped back at late morning – again with shares – after the software maker reported earnings after the market close on Monday.

The Coupa 0.125% notes due 2025 were up more than 2 points at 126.473 at about 10 a.m. ET, and the Coupa 0.375% notes due 2026 were up nearly a point at 98.8.

But the Coupa 0.375% notes slipped back to a 96 handle. Coupa shares were higher in the early going but were down $3.12, or 1.8%, to $170.98 at about 11:30 a.m. ET.

On Monday, Coupa’s stock slid 9% in extended trading after the company reported a $91.2 million, or $1.23 per share, loss for its fiscal third quarter, according to a report. That compared to a loss of $60.8 million, or 88 cents a share, in the earlier quarter. Adjusted earnings were $31 cents a share. Revenue, however, rose 40% to $185.8 million from $132.9 million.

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