Morning Commentary: Travere Therapeutics convertibles price, jump on aftermarket debut

By Abigail W. Adams

Portland, Me., March 9 – New paper was in focus on a relatively quiet morning in the convertibles secondary space as the first new deal of the week made its aftermarket debut.

Travere Therapeutics Inc. priced an upsized $275 million of seven-year convertible notes after the market close on Tuesday at par with a coupon of 2.25% and an initial conversion premium of 35%.

Pricing came at the cheap end of talk for a coupon of 1.75% to 2.25% and at the midpoint of talk for an initial conversion premium of 32.5% and 37.5%.

The greenshoe was also upsized to $41.25 million. The initial size of the offering was $250 million with a greenshoe of $37.5 million.

The new paper was putting in a strong performance in the aftermarket as equities broke out of their rout.

The new paper traded to a low of 100.5 and a high of 103.75 within the first hour of trading, a source said.

However, the majority of prints were on a 101-handle.

While equity markets were strong early Wednesday, Travere’s stock was in negative territory.

Stock was changing hands at $23.45, a decrease of 0.68%, shortly before 11 a.m. ET.

Proceeds from the new offering were being used to repurchase for cash $207.1 million of the biotech’s outstanding 2.5% convertible notes due 2025 in privately negotiated transactions.

The buyback price for the outstanding bonds appeared to be 102, a source said.

Outside of Travere, the secondary space was relatively quiet as equity markets broke their losing streak.

The Dow Jones industrial average was up 630 points, or 1.95%, the S&P 500 index was up 2.3%, the Nasdaq Composite was up 3% and the Russell 2000 index was up 2.7% shortly before 11 a.m. ET.

However, few names were on the tape.

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