Pluralsight convertible notes in focus; Aceto jumps; AMAG contracts; NIO down again

By Abigail W. Adams

Portland, Me., March 8 – While equities saw a solid week of losses, the convertibles secondary market continued to hold.

With Treasuries strong and a spike in volatility, it was a good time to be in convertibles, a market source said.

The secondary space was active on Friday with $97 million on the tape early in the session and $431 million on the tape later in the afternoon.

New paper remained in focus with Pluralsight Inc.’s 0.375% convertible notes due 2024 continuing to see high-volume activity.

The notes again expanded after a large dollar-neutral expansion on their Thursday debut.

Aceto Corp.’s 2% convertible notes due 2020 saw another burst of activity on Friday with the notes jumping after the company received another bid for some of its assets.

AMAG Pharmaceuticals Inc.’s 3.25% convertible notes due 2022 were taking a hit on an outright and dollar-neutral basis as stock tanked following a failed clinical trial.

NIO Inc.’s recently priced 4.5% convertible notes due 2024 were coming in from their highs with stock down more than 30% on the week. The notes made large gains alongside stock last week.

Pluralsight expands again

Pluralsight’s 0.375% convertible notes continued to see high-volume activity on Friday with the notes again improved on a dollar-neutral basis.

The 0.375% notes were changing hands around 100.375 with stock again on the decline early in the session.

They jumped as high as 101 as the session progressed but stood poised to close the day at 100.625.

The notes expanded another 0.5 point dollar-neutral, a market source said.

About $19 million was on the tape early in the session and $30 million was on the tape by the late afternoon.

Pluralsight stock closed Friday at $28.82, a decrease of 0.45%.

The notes dominated activity on their market debut on Thursday and saw a 1.25 point dollar-neutral expansion.

Aceto jumps

Aceto’s 2% convertible notes due 2020 saw another burst of activity on Friday with the notes jumping after the company received another bid for some of its assets.

The 2% notes jumped 5 points to 50 in active trading, a market source said.

More than $10 million of the bonds were on the tape during Friday’s session.

Aceto announced on Friday that it had entered into a purchase agreement to sell the assets of Rising Pharmaceuticals to Shore Suven Pharma Inc. for $15 million, Prospect News reported.

Aceto filed for Chapter 11 bankruptcy protection in late February. The notes were trading as high as 83 in August but dropped to around 65 after the bankruptcy filing.

Aceto entered into a purchase agreement with New Mountain Capital for its chemicals business, which included the assumption of liabilities, when it filed for bankruptcy on Feb. 20.

The 2% notes saw a burst of activity on March 1 and dropped to the 45 range, which several sources noted as odd.

AMAG tanks

AMAG Pharmaceuticals’ 3.25% convertible notes due 2022 were the ‘disaster du jour’ of Friday’s session, a market source said.

The notes were trading down on an outright and dollar-neutral basis as stock tanked following the failure of a clinical trial.

The 3.25% notes dropped 5.25 points outright to close Friday at 84.5. They were contracted 1.25 points dollar-neutral, a market source said.

AMAG stock traded as low as $10.70 and closed the day at $11.32, a decrease of 17.49%.

Stock tanked on Friday following the results of a clinical trial.

AMAG’s clinical trial for Makena, a treatment for premature birth, failed to meet its end goals with results showing no significant statistical difference from the placebo, the company said in a press release.

NIO comes in

After a meteoric rise last week, NIO’s 4.5% convertible notes due 2024 continued their downward spiral on Friday with stock taking a hit over the past few trading sessions.

The 4.5% notes were changing hands around 97 for those that were able to participate in the borrow facility established when the notes priced.

The notes dropped to 91 for those that were not able to participate in the borrow facility, a market source said.

NIO American Depositary Shares closed Friday at $7.06, a decrease of 0.42%.

NIO’s convertible notes and equity have been on a downward spiral since Tuesday when the Shanghai-based electric car manufacturer released it’s fourth-quarter earnings report.

Prior to the report, the 4.5% notes were trading around 115. Stock has dropped more than 30% since Tuesday.

The notes made large gains alongside stock last week following a positive segment on “60 Minutes.”

NIO’s 4.5% notes have been trading on a two-tier system based on those who were able to borrow through the borrow facility and those that were not.

While there is currently no borrow on NIO’s American Depositary Shares outside of the borrow facility, that may change once the lockup period comes to an end next week, a market source said.

Mentioned in this article:

Aceto Corp. Nasdaq: ACET

AMAG Pharmaceuticals Inc. Nasdaq: AMAG

NIO Inc. NYSE: NIO

Pluralsight Inc. Nasdaq: PS

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