Enovix convertible notes skyrocket on debut; Blackstone Mortgage weaker; DraftKings up

By Abigail W. Adams

Portland, Me., April 18 – The convertibles primary market continued to squeak out deals as the market enters into the heart of earnings season with small wall-crossed offerings and privately negotiated exchanges in play.

In a deal that priced shortly after launching, Enovix Corp. sold $150 million of five-year convertible notes after the market close on Monday.

While the deal played to a limited audience during bookbuilding, the notes were sought after in the aftermarket with the new notes skyrocketing on debut.

Outside of Enovix’s new notes, it was an uneventful day in the secondary space with equities mixed and Treasuries flat as the market digested a wave of bank earnings.

The Dow Jones industrial average closed Tuesday down 11 points, or 0.03%, the S&P 500 index closed up 0.09%, the Nasdaq Composite index closed down 0.04% and the Russell 2000 index closed down 0.40%.

There was $102 million in reported volume about one hour into the session and $475 million on the tape about one hour before the market close.

Blackstone Mortgage Trust Inc.’s 5.5% convertible notes due 2027 were weaker in heavy volume amid continued pain for REITs.

Trading activity remained concentrated in investment-grade issues with Duke Energy Corp.’s 4.125% convertible notes due 2026 (Baa2/BBB) continuing to dominate the tape.

DraftKings Inc.’s 0% convertible notes due 2028 were on the rise in active trade on a strong day for stock.

Enovix surges

In an overnight deal, Enovix sold $150 million of five-year convertible notes after the market close on Monday at par with a coupon of 3% and an initial conversion premium of 15%.

The deal was tight knit with little information circulated to investors who were not involved, a source said.

However, the new notes were sought after in the aftermarket and skyrocketed on debut.

The 3% notes were marked at 103.5 bid, 106.75 offered in the early afternoon and continued to climb as the session progressed.

They were changing hands at 107.25 versus a stock price of $13.76 in the late afternoon.

The notes expanded 4.5 points dollar-neutral.

There was $19 million in reported volume.

Enovix’s stock traded to a low of $13.12 and a high of $14.37 before closing at $13.31, a decrease of 1.92%.

Blackstone weaker

Blackstone Mortgage Trust’s 5.5% convertible notes due 2027 were active with the notes weaker amid continued pain for REITs.

The 5.5% notes were off about 0.5 point outright in round-lot trades.

The notes were trading in the 79 to 79.375 context in round-lot prints with the yield about 12.33%, a source said.

However, there were many small prints with the notes trading as low as 78.5.

The activity appeared to be retail traders liquidating small positions in the issue, a source said.

There was $17 million in reported volume with almost 2,000 trades in the issue.

Blackstone Mortgage’s stock traded to a low of $17.44 and a high of $17.96 before closing at $17.83, off 0.67%.

DraftKings rises

DraftKings’ busted 0% convertible notes due 2028 were on the rise in active trade on Tuesday.

The notes gained about 1 point outright with stock up 6%.

They were changing hands at 71.25 versus as stock price of $20.67 in the late afternoon.

There was $11 million in reported volume.

DraftKings’ stock traded to a low of $19.72 and a high of $20.99 before closing at $20.92, an increase of 7.34%.

Stock has been on a tear over the past two sessions and is quickly approaching its 52-week high of $21.62.

Mentioned in this article:

Blackstone Mortgage Trust Inc. NYSE: BXMT

DraftKings Inc. Nasdaq: DKNG

Duke Energy Corp. NYSE: DUK

Enovix Corp. Nasdaq: ENVX

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