Impinj convertibles on tap; Fisker hits new outright height; Spotify notes improve

By Abigail W. Adams

Portland, Me., Nov. 1 – After banking one of the slowest months for new deal activity in recent history, the convertibles primary market launched the new month with a new deal.

Impinj Inc. plans to price $225 million of six-year convertible notes after the market close on Tuesday with price talk for a coupon of 1.25% to 1.75% and an initial conversion premium of 37.5% to 42.5%, according to a market source.

Proceeds from the refinancing deal will be used to repurchase for cash a portion of the company’s 2% convertible notes due 2026 in privately negotiated transactions.

The convertibles primary market saw only one convertible bond deal totaling $155 million price in October, marking the lightest volume month of the year and the slowest in recent history.

However, sources expect an active calendar in November.

Meanwhile, trading activity in the convertibles secondary space was muted on Monday as equities struggled to find direction.

After a choppy session that saw most benchmarks waiver between gains and losses, indexes saw a strong close with many again hitting fresh heights.

The Dow Jones industrial average closed the day up 94 points, or 0.26%, the S&P 500 index closed the day up 0.18%, the Nasdaq Composite closed up 0.63%, and the Russell 2000 index closed up 2.65%.

There was $65 million on the tape about one hour into the session and $389 million on the tape about one hour before the market close.

While it was slow, there were pockets of solid activity, a source said.

Fisker Inc.’s 2.5% convertible notes due 2026 were in focus with the notes hitting their highest outright level since pricing and expanding dollar-neutral as stock continued its upward momentum.

Spotify Technology SA’s 0% exchangeable notes due 2026 also continued their upward momentum on the heels of better-than-expected earnings the previous week.

Airbnb Inc.’s 0% convertible notes due 2026 were active and making gains on the eve of the company’s earnings.

Medallia Inc.’s 0.125% convertibles due 2025 continued to see some carry over activity following the closing of Thoma Bravo’s $6.4 billion all-cash acquisition of the company, which was announced last Friday.

Fisker’s new heights

Fisker’s 2.5% convertible notes due 2026 were in focus on an otherwise quiet day in the secondary space with the notes hitting their highest outright level since pricing.

The 2.5% convertible notes rose almost 5 points outright with stock up more than 7%.

The notes were changing hands at 110 versus an equity price of $17.43 in the late afternoon.

They expanded 0.5 point dollar-neutral.

There was more than $13 million in reported volume, making the notes among the top traders of the day.

The electric vehicle maker’s stock traded to a low of $16.60 and a high of $17.61 before closing the day at $17.50, an increase of 9.03%.

Fisker’s notes continued their upward momentum as stock continued to improve, due to optimism over the inclusion of tax incentives for electric vehicles in the infrastructure bill.

The notes broke par last week. They traded as low as 89 as recently as mid-September.

“They’ve had a nice rebound,” a source said.

Spotify improves

Spotify’s 0% convertible notes due 2026 also continued to improve with stock posting gains on the heels of the streaming company’s earnings report.

The 0% convertible notes rose about 0.5 point outright with stock up 4%.

The notes were changing hands at 96 versus a stock price of $297.38, according to a market source.

There was about $13 million in reported volume.

Spotify’s stock traded to a low of $294.52 and a high of $302.57 before closing the day at $300.95, an increase of 3.99%.

Spotify’s stock has been on the rise since reporting a better-than-expected earnings report last week.

Stock climbed more than 15% over the past week and more than 35% over the past month.

However, stock is still below its level when the convertible notes priced.

Airbnb gains

Airbnb’s 0% convertible notes due 2026 were on the rise alongside stock with the company slated to report earnings later in the week.

The 0% convertible notes rose about 2 points outright with stock up almost 2.5%.

The 0% convertible notes were changing hands at 99 versus a stock price of $171.50 early in the session.

The notes were changing hands just shy of par versus a stock price of $174.81 in the late afternoon.

There was about $6 million in reported volume.

Airbnb’s stock traded to a high of $175.44 and a low of $170.50 before closing the day at $174.60, an increase of 2.31%.

Airbnb is slated to report earnings after the market close on Thursday.

Medallia active

Medallia’s 0.125% convertibles due 2025 remained active following the closing of Thoma Bravo’s $6.4 billion all-cash acquisition of the company, which was announced last Friday.

The notes were changing hands at 108 with about $4 million in reported volume early in the session.

Medallia’s stock is no longer listed on the New York Stock Exchange.

Thoma Bravo purchased the company for $34 a share in cash.

The convertible notes were most likely trading at their takeout price, a source said.

Mentioned in this article:

Airbnb Inc. Nasdaq: ABNB

Fisker Inc. NYSE: FSR

Impinj Inc. Nasdaq: PI

Spotify Technology SA NYSE: SPOT

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