Morning Commentary: BlackLine convertibles eyed; Itron, Vocera, Avid Bioservices expand

By Abigail W. Adams

Portland, Me., March 10 – New convertibles paper remained in focus on Wednesday with one $1 billion offering slated to price after the market close and three deals totaling $725 million making their aftermarket debut.

BlackLine Inc. plans to price $1 billion of five-year convertible notes after the market close on Wednesday.

The offering modeled cheap based on underwriters’ assumptions, sources said.

Meanwhile, new paper from Vocera Communications Inc., Itron Inc. and Avid Bioservices Inc. made their aftermarket debut.

The pricing of the paper was mixed with one deal coming at the rich end of talk, another pricing at the mids, and another pricing at the cheap end of talk.

The new paper saw a strong start in the secondary space with all expanding on debut.

BlackLine eyed

BlackLine plans to price $1 billion of five-year convertible notes after the market close on Wednesday with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 42.5% to 47.5%.

The deal was heard to be in the market with assumptions of 350 basis points over Libor and a 40% vol., according to a market source.

Using those assumptions, the deal looked 1.36 points cheap at the midpoint of talk, a source said.

Vocera at the mids

Vocera priced $200 million of long five-year convertible notes after the market close on Tuesday at par with a coupon of 0.5% and an initial conversion premium of 35%.

Pricing came at the midpoint of talk for a coupon of 0.25% to 0.75% and an initial conversion premium of 32.5% to 37.5%, according to a market source.

The new paper expanded 0.5 point dollar-neutral.

Avid comes cheap

Avid Bioservices sold $125 million of five-year exchangeable notes after the market close on Tuesday at par at the cheap end of talk with a coupon of 1.25% and an initial exchange premium of 32.5%.

Price talk was for a coupon of 0.75% to 1.25% and an initial exchange premium of 32.5% to 37.5%, according to a market source.

The notes were also up 0.5 point dollar-neutral, a source said.

Itron rich

Itron priced $400 million of five-year convertible notes after the market close on Tuesday at par with a coupon of 0% and an initial conversion premium of 40%.

Pricing came in line with talk for a fixed coupon of 0% and at the rich end of talk for an initial conversion premium of 35% to 40%, according to a market source.

Concurrently, the company priced a secondary offering of 3.9 million shares at a price of $90.00 per share.

The new notes outperformed and were up more than 2.5 points dollar-neutral, a source said.

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