Opendoor, Upstart convertibles on tap; Booking in focus; Cloudflare down outright

By Abigail W. Adams

Portland, Me., Aug. 16 – The convertibles primary market launched the week with two sizable offerings on deck.

Upstart Holdings Inc. plans to price $575 million of five-year convertible notes and Opendoor Technologies Inc. plans to price $750 million of five-year convertible notes after the market close on Tuesday.

While the primary market saw an active start to the week, the secondary space was off to a slow start with equity markets again choppy.

While equity benchmarks launched the day deep in the red, the S&P 500 index and the Dow Jones industrial average turned positive and set fresh records by the market close.

The Dow closed the day up 110 points, or 0.31%, and the S&P 500 index closed the day up 0.26% while the Nasdaq Composite closed the day down 0.2% and the Russell 2000 index closed the day down 0.89%.

There was $63 million in reported volume about one hour into the session and $353 million on the tape about one hour before the market close, sources said.

Booking Holdings Inc.’s convertible notes were in focus as the company’s 0.9% convertible notes due Sept. 15, 2021 approach their maturity.

Cloudflare Inc.’s 0% convertible notes due 2026 were down outright with stock under pressure alongside the broader tech sector.

iQIYI Inc.’s 3.75% convertible notes due 2023 continued to trade actively with the company’s equity again under pressure.

The calendar

The primary market leapt into action on Monday with two large offerings on deck.

Upstart Holdings plans to price $575 million of five-year convertible notes after the market close on Tuesday with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 42.5% to 47.5%, according to a market source.

Goldman Sachs & Co. LLC (lead left) and BofA Securities Inc. are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $86.25 million.

Opendoor Technologies plans to price $750 million of five-year convertible notes after the market close on Tuesday with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 30% to 35%, according to a market source.

Citigroup Global Markets Inc. is lead left bookrunner for the Rule 144A offering, which carries a greenshoe of $112.5 million.

Booking in focus

Booking’s convertible notes topped the volume charts on an otherwise quiet day in the secondary space as one of the company’s tranches approaches its maturity.

Booking’s 0.9% convertible notes were changing hands at 104.136 versus an equity price of $2,111.84 during Monday’s session.

There was about $30 million of the bonds on the tape.

The notes were trading at about parity and are in their averaging period, a source said.

Booking’s 0.75% convertible notes due 2025 were the second most actively traded issue in the secondary space.

The notes were changing hands at 139 versus a stock price of $2,117.28.

There was about $21 million of the bonds on the tape.

Booking’s stock traded to a high of $2,198.04 and a low of $2,092.69 before closing the day at $2,130.89, a decrease of 3.29%.

The tranches were active as the 0.9% notes approach their maturity.

Holders were most likely switching from the short-duration notes to the longer-duration notes, a source said.

Booking announced last week that it would settle any conversion of the 0.9% notes in cash.

Cloudflare down outright

Cloudflare’s 0% convertible notes due 2026 remained active with the notes again below par as stock sold off during Monday’s session.

The 0% notes traded down to a 98-handle early in the session.

However, they bounced off their lows as stock pared their losses alongside the broader market.

The 0% notes were changing hands at 99 versus a stock price of $120.40 in the late afternoon.

There was $18.5 million in reported volume.

Cloudflare’s stock traded to a low of $116.64 and a high of $120.99 before closing the day at $120.38, a decrease of 1.13%.

iQIYI active

iQIYI’s 3.75% convertible notes due 2023 continued to trade actively.

The notes were unchanged on an outright basis with stock again under pressure.

The 3.75% notes continued to trade on a 97 handle.

They were changing hands at 97.5 in the late afternoon, according to a market source.

iQIYI’s American Depositary Shares traded to a high of $9.41 and a low of $8.94 before closing the day at $8.98, a decrease of 5.17%.

The notes are putable on Dec. 1, giving them a yield of more than 12%.

Outright accounts have been buyers of the notes due to their large yield, a source previously said.

The Beijing-based online entertainment service provider’s equity has been under pressure in recent months.

Mentioned in this article:

Booking Holdings Inc. Nasdaq: BKNG

Cloudflare Inc. NYSE: NET

iQIYI Inc. Nasdaq: IQ

Opendoor Technologies Inc. Nasdaq: OPEN

Upstart Holdings Inc. Nasdaq: UPST

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.