Morning Commentary: Akamai convertible notes price, open flat; Workiva moves lower

By Abigail W. Adams

Portland, Me., Aug. 16 – It was another active day in the convertibles secondary space as $1.1 billion in new paper entered the market.

Akamai Technologies Inc. priced an upsized $1.1 billion of long five-year convertible notes after the market close on Tuesday at par with a coupon of 1.125% and an initial conversion premium of 22.5%.

The notes priced at the rich end of talk for a coupon of 1.125% to 1.625% and at the cheap end of talk for an initial conversion premium of 22.5% to 27.5%.

The greenshoe was also upsized to $165 million.

The initial size of the offering was $1 billion with a greenshoe of $150 million.

While the deal modeled cheap, the new paper fell flat in early trading.

Akamai’s new paper hit the secondary space on a mixed open for equity indexes as market players eyed the afternoon release of the Federal Open Market Committee’s July minute notes.

The Dow Jones industrial average was up 78 points, or 0.22%, the S&P 500 index was up 0.04%, the Nasdaq Composite index was down 0.21% and the Russell 2000 index was down 0.19% shortly before 11 a.m. ET.

There was $134 million in reported volume about one hour into the session with Akamai’s new notes accounting for about 50% of the activity in the space.

The 1.125% notes due 2029 were flat pre-open and trading at par bid, 100.25 offered on swap, a source said.

They saw little improvement post-open with the notes marked at par versus a stock price of $102.40 about one hour into the session.

There was $67 million in reported volume.

Akamai’s stock was changing hands at $102.34, a decrease of 0.74%, shortly before 11 a.m. ET.

While new paper from Akamai was in focus, Workiva Inc.’s 1.25% convertible notes due 2028 continued to move lower their second day in the secondary space.

The 1.25% convertible notes traded as low as 97.375 pre-open and were seen at 98 versus a stock price of $98.67 about one hour into the session, a source said.

There was $7 million in reported volume.

Workiva’s stock was changing hands at $99.25, an increase of 1.28%, shortly before 11 a.m. ET.

Workiva’s 1.25% convertible notes struggled on their aftermarket debut on Tuesday with the notes trading well below par and falling flat dollar-neutral.

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