Morning Commentary: Etsy convertibles open flat to slightly better; Adesto at 104.5

By Rebecca Melvin

New York, Sept. 19 – Etsy Inc.’s newly priced 0.125% convertibles opened flat to slightly higher on Thursday after the New York-based e-commerce site priced $650 million of the seven-year notes at par in an overnight deal.

The notes were said to be 100 bid to 100.125 or 100.25 offered at the open, according to a New York-based market source.

At late morning the new paper was seen to have traded at 100.41, according to Trace data. Etsy shares were up modestly by around 1% in the early going. They were $59.64 last, which was up 0.3%.

The existing Etsy 0% notes due 2023 were seen in trade on Thursday at 176.45, which Trace recorded as down 2.67 points.

The newly priced Adesto Technologies Corp. 4.25% convertibles zoomed up to 104.5 on their debut after the California-based tech company priced $70 million of the five-year notes at the rich end of talk.

Pricing of the Rule 144A deal occurred at the rich end of talked terms, which were for a coupon of 4.25% to 4.75% and an initial premium of 27.5% to 32.5%.

Adesto shares were up 31 cents, or 3.4%, at $9.36 at late morning. They were still below the $10.63 mark at which they stood prior to the convertible being announced.

SailPoint Technologies Holdings Inc. was also in focus after the software company announced that it plans to price $300 million of five-year convertible notes.

The notes were expected to price after Thursday’s market close, and they were being talked to yield 0.125% to 0.625% with an initial conversion premium of 32.5% to 37.5%.

Fair value of the SailPoint notes was said to be 101.79 at the midpoint of price talk using a credit spread of 325 basis points over Libor and a 40% vol., a New York-based trader said.

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