ConMed convertibles on tap; Tilray up; Exact Sciences expands; Citrix, Illumina active

By Abigail W. Adams

Portland, Me., Jan. 23 – The convertible primary market returned to action on Wednesday with one new deal on the horizon.

ConMed Corp. plans to price $275 million of five-year convertible notes after the market close on Thursday with price talk for a coupon of 2.875% to 3.375% and an initial conversion premium of 22.5% to 27.5%, according to a market source.

J.P. Morgan Securities LLC (lead left) and Barclays are active bookrunners for the Rule 144A deal, which carries a greenshoe of $41.25 million.

BofA Merrill Lynch and Wells Fargo Securities LLC are passive bookrunners.

Meanwhile, there were few notable movements in the secondary space during Wednesday’s session with the exception of Tilray Inc.

Tilray’s 5% convertible notes due 2023 saw a large dollar-neutral expansion on Wednesday with the borrow on the stock significantly improved following the end of the company’s post-IPO lockup.

Exact Sciences Corp.’s 1% convertible notes due 2025 also expanded in high-volume activity as stock surged during Wednesday’s session.

Illumina Inc.’s 0.5% convertible notes due 2021 and 0% convertible notes due 2023 were active with holders switching from the shorter to the longer duration notes.

Citrix Systems Inc.’s soon to mature 0.5% convertible notes due April 15, 2019 were again among the top traded issues in the secondary space with the notes continuing to trade at parity in the run up to its fourth-quarter earnings report.

Tilray jumps

Tilray’s 5% convertible notes due 2023 saw a large dollar-neutral expansion on Wednesday with the borrow on the stock dramatically improved following the end of the company’s post-IPO lockup.

The 5% convertible notes jumped 4 points outright to trade up to 81.625.

They were expanded 3 to 4 points dollar-neutral, a market source said.

Tilray stock closed Wednesday at $71.74, a decrease of 1.46%.

The large dollar-neutral expansion was attributed to a dramatic improvement in the borrow on Tilray’s stock, which has enabled hedging activity.

Problems with the borrow on Tilray stock was a common lament with the rates at one point as high as 900%.

The rates have since come down dramatically. They were 35% on Wednesday, a market source said.

Exact Sciences expands

Exact Sciences 1% convertible notes due 2025 also saw a dollar-neutral expansion in high-volume activity as stock surged on Wednesday.

The 1% convertible notes were among the top traded issues of Wednesday’s session with more than $15 million on the tape.

The notes rose 4 points outright and were expanded about 0.5 point dollar-neutral, a market source said.

They were seen changing hands around 128.5 in the mid-afternoon.

After trading as high as $81, Exact Sciences stock closed Wednesday at $79.71, an increase of 4.79%.

Exact Sciences stock has seen upward momentum over the last two weeks after announcing preliminary fourth-quarter results that beat analyst expectations.

Exact Sciences announced on Jan. 7 that it is expecting fourth-quarter revenue of between $142.5 million and $143.5 million.

Nearly 15,000 health-care providers ordered the use of its flagship product Cologuard for colorectal cancer screening during the quarter, the company said in a press release.

Illumina active

Illumina’s 0.5% convertible notes due 2021 and 0% convertible notes due 2023 were also volume movers on Wednesday with some holders switching from the short-dated to the longer-dated paper, a market source said.

The notes saw a slight dollar-neutral expansion in the high-volume activity with both tranches improved by 0.125 to 0.25 point, a source said.

The 0.5% convertible notes were changing hands around 132.5. The 0% convertible notes were trading around 104.

Illumina stock traded as high as $308.00 and as low as $297.00 before closing the day at $302.29, a decrease of 0.44%.

Citrix earnings

Citrix’s 0.5% convertible notes due April 15, 2019 again saw high-volume activity on Wednesday as the company prepared to release fourth-quarter earnings.

More than $10 million of the bonds were on the tape with the notes continuing to trade around parity.

The 0.5% notes were seen changing hands at 151.5, according to a market source.

Citrix Systems stock was up early Wednesday but came in as the session progressed. Stock traded as high as $109.75 but closed the day largely flat at $108.66, an increase of 0.38%.

Stock was trading down after hours following the software company’s earnings report.

Citrix beat analyst expectations on both the top and bottom-line but missed on first-quarter guidance.

Citrix reported non-GAAP earnings per share of $1.67 on revenue of $801.9 million versus analyst expectations for earnings per share of $1.59 on revenue of $790.3 million.

However, Citrix forecast earnings per share of $1.15 to $1.20 versus analyst expectations of earnings per share of $1.36.

Mentioned in this article:

Citrix Systems Inc. Nasdaq: CTXS

ConMed Corp. Nasdaq: CNMD

Exact Sciences Corp. Nasdaq: EXAS

Illumina Inc. Nasdaq: ILMN

Tilray Inc. Nasdaq: TLRY

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