Morning Commentary: Cryoport, Becton Dickinson eyed; Sea, RealPage, Model N, Tricida price

By Abigail W. Adams

Portland, Me., May 20 – New deals remained the focus of the convertibles universe on Wednesday with two new deals set to price after the market close and four new deals making their aftermarket debut.

Becton, Dickinson and Co. plans to price $1.5 billion of $50-par depositary shares representing a 1/20th interest in its $1,000-par three-year series B mandatory convertible preferred stock, and Cryoport, Inc. plans to price $100 million of five-year convertible notes after the market close on Wednesday.

Becton Dickinson’s offering looked cheap based on underwriters’ assumptions, a market source said.

Sea Ltd. priced $1 billion of long five-year convertible notes, RealPage, Inc. priced $300 million of five-year convertible notes, Model N Inc. sold $150 million of five-year convertible notes, and Tricida Inc. priced $175 million of seven-year convertible notes after the market close on Tuesday.

The new paper dominated trading activity with reported volume surpassing $258 million less than one hour into the session.

The new paper was performing well on an outright basis.

Becton eyed

Becton, Dickinson and Co. plans to price $1.5 billion of $50-par depositary shares representing a 1/20th interest in its $1,000-par three-year series B mandatory convertible preferred stock after the market close on Wednesday with price talk for a dividend of 6% to 6.5% and an initial conversion premium of 17.5% to 22.5%, according to a market source.

The deal was heard to be in the market with assumptions of 175 basis points over Libor and a 24% to 26% vol., according to a market source.

Using those assumptions, the deal looked almost 3 points cheap at the midpoint of talk.

Cryoport on deck

Cryoport plans to sell $100 million of five-year convertible notes after the market close on Wednesday with price talk for a coupon of 2.75% and an initial conversion premium of 15%, according to market sources.

Jefferies LLC and SVB Leerink LLC are bookrunners for the Rule 144A offering, which carries a greenshoe of $15 million.

Sea dominates

Sea priced $1 billion of long five-year convertible notes after the market close on Tuesday at par at the midpoint of talk with a coupon of 2.375% and an initial conversion premium of 32.5%.

Price talk was for a coupon of 2.125% to 2.625% and an initial conversion premium of 30% to 35%, according to a market source.

The 2.375% notes dominated activity in the secondary space with the notes jumping on an outright basis as stock soared.

The 2.375% notes traded up to a 106-handle early Wednesday with the company’s equity up more than 6%, according to a market source.

The notes saw more than $87 million in reported volume about one hour into the session.

The Singapore-based consumer internet company’s 1% convertible notes due 2024 were also active with the notes up 6 points outright to 152.75.

Sea’s American Depositary Shares traded up to $73.28, an increase of 7.45%, shortly before 11 a.m. ET.

Concurrently with the convertible notes offering, the company entered into separately negotiated transactions to exchange $150 million of the principal amount of its 2.25% convertible notes due 2023 for $50 million in cash plus unpaid interest and 6.9 million American Depositary Shares.

RealPage gains

RealPage priced $300 million of five-year convertible notes after the market close on Tuesday at par at the midpoint of talk with a coupon of 1.5% and an initial conversion premium of 30%.

Price talk was for a coupon of 1.25% to 1.75% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

Concurrently, the company priced a secondary offering of 5,084,746 shares of common stock at $59.00 per share.

The 1.5% notes were also posting gains on an outright basis as stock traded well above the reoffer price in the secondary offering.

The 1.5% notes were changing hands at 104.25 early in the session. More than $68 million was on the tape early in the session.

RealPage stock was changing hands at $62.22, an increase of 0.92%, shortly before 11 a.m. ET.

Model N prices cheap

Model N priced $150 million of five-year convertible notes after the market close on Tuesday at par at the cheap end of talk with a coupon of 2.625% and an initial conversion premium of 27.5%.

Price talk was for a coupon of 2.125% to 2.625% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

Tricida prices cheap

Tricida brought $175 million of seven-year convertible notes after the market close on Tuesday at the cheap end of talk at par with a coupon of 3.5% and an initial conversion premium of 25%.

Price talk was for a coupon of 3% to 3.5% and an initial conversion premium of 25% to 30%, according to a market source.

The 3.5% notes were also posting gains on an outright basis in active trading. The notes were changing hands at 102.25 with stock up about 2%.

There was about $12 million in reported volume one hour into the session.

Tricida stock was changing hands at $27.15, an increase of 2.14%, shortly before 11 a.m. ET.

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