Invitae convertible adds outright; Talend deal prices in busy holiday-shortened week

By Rebecca Melvin

New York, Sept. 6 – Two more deals priced for the convertibles market late Thursday, bringing the issuance tally up to an outsized $4 billion for this holiday-shortened week. Pricing for investors in the week overall fell a bit short however.

Invitae Corp., which priced an upsized $300 million of 2% five-year convertible senior notes at par, looked to be about even on the day. The notes priced with an initial conversion premium of 40%. The deal was upsized from $200 million, and pricing came at the midpoint of talked terms.

Invitae shares were in the green in the early going on Friday, but just fractionally, holding in at $21.30, which was up almost a dime.

Later in the session, the new Invitae notes were quoted at 101 bid, 101.5 offered with the common shares plus or minus 1%.

The day’s other new deal was Talend SA’s €125 million of 1.75% five-year convertible notes, which also priced at par. That deal is billed as the first convertible note offering in the United States by a French issuer. It was marketed primarily to U.S. investors under Rule 144A, but due to the fact that it was still denominated in euros, meant that the market source Prospect News spoke with wasn’t going to look at it.

The Talend shares were fractionally negative, or down 22 cents at $38.50 in late morning trade.

For the week, there was a surprising rush to issue in the first week after Labor Day. And one market source seemed to capture what many were feeling when he said, “This week has been insane.”

Normally there is a gearing up that the market didn’t use this time around. The deals that priced were so-so in terms of pricing. Most of the stocks sold off, and four of the deals closed below issue price on their first day of trading.

NextEra Energy Partners, LP was the outlier on the downside with a slight contraction on swap for its $1.5 billion of three-year mandatory convertible equity units that hit the market on Thursday. On Friday the units were quoted at 48.50, which was below the 48.75 reoffered price, according to a New York-based market source.

The new tranches of Okta Inc. and Zillow Group Inc. also closed below issue with small expansion on a dollar-neutral basis. “If you got your hedge off, great,” but overall “not a great outcome,” a New York-based market source said.

Of this week’s issuance, Insulet Corp.’s newly priced 0.375% convertibles seemed to put in the strongest debut performance. According to the New York-based market source, those new notes expanded 1.3 points on hedge. On Friday the notes were optically weak, changing hands on an outright basis at 98.872, according to Trace data.

But Aerie Pharmaceuticals Inc.’s notes were back at issue price, changing hands at exactly 100.018, according to Trace.

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