New convertible notes from Bentley Systems, 21Vianet expand on debut; Nio improves

By Abigail W. Adams

Portland, Me., Jan. 22 – The first new convertible paper of the week made its aftermarket debut on Friday.

Bentley Systems Inc. priced an upsized $600 million of five-year convertible notes and 21Vianet Group Inc. sold $525 million five-year convertible notes after the market close on Thursday.

The new paper was in demand during bookbuilding and in the secondary space with both offerings trading up on debut.

While the two deals were the only new paper of the week, there is an active calendar, and the coming weeks are expected to be busy, a source said.

With volatility remaining high and credit spreads tight, the aggressive pricing seen in recent deals, with 0% coupons and high premiums, is expected to continue.

While the tech sector has been the dominant sector for recent deals, other sectors may soon make an appearance with more health care names surfacing, a source said.

Meanwhile, Nio Inc.’s convertible notes were once again active and posting gains as the company’s American Depositary Shares caught a bid during Friday’s session.

Bentley Systems in demand

Bentley Systems priced an upsized $600 million of five-year convertible notes after the market close on Thursday at par at the rich end of talk with a coupon of 0.125% and an initial conversion premium of 45%, according to a market source.

Price talk was for a coupon of 0.125% to 0.625% and an initial conversion premium of 40% to 45%.

The notes were putting in a strong performance on their aftermarket debut.

They were marked at 103.625 bid pre-open.

The notes were changing hands at 103.56 with stock off early in the session and shot up to 105 in the late afternoon as stock turned positive.

The notes expanded 4.25 to 4.5 points dollar-neutral, sources said.

There was more than $51 million in reported volume.

Bentley Systems’ stock traded to a high of $46.41 and a low of $42.27 before closing the day at $45.85, an increase of 3.66%.

“It’s done phenomenally well,” a source said.

The convertible bond is the infrastructure engineering software company’s first straight debt offering.

The company went public in September and priced a follow-on offering in November.

The convertible notes offering from a company that went public in the last six months is an indication of how robust the convertible market has become.

“If the market was not exceptionally robust, that would be hard to do,” a source said.

21Vianet expands

21Vianet Group priced $525 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 40%.

Pricing came in line with tightened talk for a fixed coupon of 0% and at the rich end of talk for an initial conversion premium of 37.5% to 40%, according to a market source.

Initial price talk was for a coupon of 0% to 0.5% and an initial conversion premium of 32.5% to 37.5%, according to a market source.

The new 0% notes were also trading up on an outright and dollar-neutral basis.

They were marked at 101.75 bid pre-open.

The notes continued to gain after the opening bell and were changing hands at 103 early in the session.

They continued to rise as the Beijing-based internet data center services provider’s ADS caught a bid.

The notes rose to 105 in intraday activity and closed the day at 104.25, sources said.

They were expanded 1.25 points dollar-neutral, a source said.

The notes were in focus with more than $87 million on the tape.

21Vianet’s ADS traded to a low of $39.00 and a high of $41.98 before closing the day at $41.17, an increase of 5.81%.

Nio gains

Nio’s convertible notes were once again active with the notes posting gains alongside stock.

The Shanghai-based electric car manufacturer’s 0.5% convertible notes due 2027 gained more than 2.5 points with stock up more than 6.19%.

The notes closed Friday at 103.5.

Nio’s 0% convertible notes due 2026 were up 2.5 points outright.

They closed the day just shy of 105.625, according to a market source.

Nio’s ADS traded to a high of $62.17 and a low of $58.32 before closing the day at $61.95, an increase of 6.19%.

The company’s ADS’s were again on an upswing after a Nomura analyst initiated coverage and set a price target of $80.30.

Mentioned in this article:

21Vianet Group Inc. Nasdaq: VNET

Bentley Systems Inc. Nasdaq: BSY

Nio Inc. NYSE: NIO

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