Morning Commentary: New Novocure convertible adds outright on debut as shares recover

By Rebecca Melvin

New York, Nov. 3 – Novocure Ltd.’s newly priced 0% convertibles traded up on an outright basis by 2 to 3 points Tuesday after the Saint Helier, Jersey-based oncology company priced $500 million of the five-year notes at terms that were rich to talk late Wednesday.

The new paper was “doing fine,” a convertibles market source said of trading on the new paper’s debut. The sources saw the notes at 102 to 103 with shares up about 1% at $113.32.

The stock had opened the session down about 0.5% after losing 8% on Monday. But the shares quickly bounced higher. On Monday, the stock closed down at $112.16, from the previous close of $122.10.

Pricing of the Novocure paper tightened to a fixed coupon of 0% and an initial conversion premium of 50% to 52.5% from initial price talk for a coupon of 0% to 0.5% and an initial conversion premium of 42.5% to 47.5%.

Elsewhere, Alteryx Inc.’s convertible notes looked to be firm if not recouping a bit of its price, which dropped on Monday. The Alteryx 1% convertibles due 2026 changed hands at 105.2 early Tuesday after a slide on Monday of about 5 points. The underlying shares were up $4.37, or 3.6%, at $126.50.

The bonds traded down to 104 on Monday from 109.

In the broader markets, equities rose in the early going Tuesday, unrattled by the U.S. election day underway culminating months of contentious campaigning. Indeed, convertibles sources were surprised on Monday to see a deal on the eve of the election.

In addition to the presidential election, there are ballot choices that will determine control of Congress and 11 gubernatorial races. About 100 million people voted prior to election day, in what was a record for early polls and a sign of a galvanized electorate.

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