Euronet Worldwide, SSR Mining on tap; Momo in focus; MercadoLibre improves; Nio expands

By Abigail W. Adams

Portland, Me., March 12 – The convertibles primary market returned to action on Tuesday with two deals totaling $700 million launching.

Euronet Worldwide, Inc. plans to price $500 million 30-year convertible notes after the market close on Wednesday with price talk for a coupon of 1% to 1.5% and an initial conversion premium of 30% to 35%, according to a market source.

Wells Fargo Securities LLC and BofA Merrill Lynch are the joint bookrunners for the Rule 144A offering, which carries a greenshoe of $25 million.

The Leawood, Kan.-based provider of electronic payment services plans to call its 1.5% convertible notes due 2044 with proceeds from the new offering.

SSR Mining Inc. plans to price $200 million 20-year convertible notes after the market close on Wednesday with price talk for a coupon of 2% to 2.5% and an initial conversion premium of 32.5% to 37.5%.

BMO Capital Markets Corp. and RBC Capital Markets LLC are the joint bookrunners for the Rule 144A and Regulation S offering, which carries a greenshoe of $30 million.

Proceeds will be used to purchase a portion of the Vancouver, B.C.-based precious metals producer’s 2.875% convertible notes due 2033.

Meanwhile, there was an uptick in activity in the convertibles secondary space on Tuesday with $136 million on the tape early in the session and $448 million on the tape by the late afternoon.

The volume and breadth of names trading was indicative of a healthy attitude toward the convertibles market, a source said.

Momo Inc.’s 1.25% convertible notes due 2025 were in focus and making gains on an outright and dollar-neutral basis as stock soared post-earnings.

MercadoLibre Inc.’s 2% convertible notes due 2028 were also making large gains on the heels of announcing a new capital raise.

Nio Inc.’s 4.5% convertible notes due 2024 were making gains in active trading with the lock-up on the company’s American Depositary Shares now over.

Momo in focus

Momo’s 1.25% convertible notes due 2025 saw high-volume activity on Tuesday with the notes making gains on an outright and dollar-neutral basis post-earnings.

The 1.25% convertible notes rose about 5 points outright to 93.875 early in the session, according to a market source.

They were seen changing hands at 93.76 versus an equity price of $31.88 later in the afternoon.

The notes were improved 1 point dollar-neutral, a market source said.

More than $15.5 million of the bonds were on the tape.

Momo stock closed Tuesday at $36.44, an increase of 11.95%.

Stock soared after Momo reported a fourth-quarter earnings beat and announced a special dividend.

Momo reported non-GAAP earnings per share of 59 cents for the fourth quarter.

Revenue was RMB 3.84 billion or $559.1 million, a 50% increase from the previous year, according to AlphaStreet.

The Beijing-based social and entertainment network also reported an uptick in active monthly users.

While the earnings report was favorable, stock soared after the company announced a special cash dividend of 62 cents per ADS, a market source said.

The conversion ratio on the notes will be adjusted to account for the special dividend.

MercadoLibre expands

MercadoLibre’s 2% convertible notes due 2028 were making large gains on outright basis on the heels of announcing a new capital raise.

The convertible notes jumped almost 8 points outright to 127.75 early in the session and were changing hands just south of 128 later in the afternoon.

The notes were improved 1.375 points to 1.5 points dollar-neutral, sources said. They were moving on an 84% delta.

More than $14 million of the bonds were on the tape by the late afternoon.

“The equity raise is beneficial to the bond,” a market source said.

However, MercadoLibre stock was relatively flat on the news.

Stock closed Tuesday at $483.48, an increase of 0.49%.

The Buenos Aires-based e-commerce company announced prior to the market open that it intended to price $1 billion of common stock in a public offering.

In addition to the public offering, PayPal has committed to purchase $750 million in common stock and an affiliate of Dragoneer Investment Group has committed to purchase $100 million in series A perpetual convertible preferred stock.

Paypal’s investment in the company is contingent on the completion of the public offering.

Nio expands

Nio’s 4.5% convertible notes due 2024 saw a large dollar-neutral expansion on Tuesday, which sources attributed to the end of the lock-up period on the company’s ADS.

The notes gained about 2 points outright as the Beijing-based electric car manufacturer’s equity continued its decline.

The 4.5% notes were changing hands at 90.75. The notes expanded as much as 4 points dollar-neutral, a market source said.

Nio ADS closed Tuesday at $6.39, a decrease of 3.03%.

Sources attributed the large improvement in the notes to the lock-up period for their ADS coming to an end.

The notes have been volatile over the past two weeks.

The notes were on the rise as stock soared following a positive 60 Minutes segment the last week of February.

However, they sank the first week of March following a disappointing fourth-quarter earnings report.

The 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.

However, with the lock-up on Nio’s ADS coming to a close, the borrow is expected to improve.

Mentioned in this article:

Euronet Worldwide, Inc. Nasdaq: EEFT

MercadoLibre Inc. Nasdaq: MELI

Momo Inc. Nasdaq: MOMO

Nio Inc. NYSE: NIO

SSR Mining Inc. Nasdaq: SSRM

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