Bandwidth, Oak Street, Invacare convertibles on deck; BlackLine eyed; Itron trades up

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, three deals totaling $1.1 billion on deck for Thursday and three deals totaling $725 million making their aftermarket debut.

Oak Street Health Inc. plans to price $750 million of five-year convertible, Bandwidth Inc. plans to sell $250 million of seven-year convertible notes and Invacare Corp. plans to price $100 million of five-year convertible notes after the market close on Thursday.

BlackLine Inc. plans to sell $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.

While Itron’s convertible notes were firm throughout the session, Avid Bioservices’ notes gave back some of their gains and Vocera dropped below par as the session progressed.

While the Nasdaq composite launched the day strong with data on inflation easing some of the concerns that triggered a sell-off in some high-flying names in the tech sector, it closed the day down 0.04%.

For Thursday

The forward calendar continued to grow with three deals totaling $1.1 billion on deck for Thursday.

Oak Street Health plans to sell $750 million of five-year convertible notes with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 42.5% to 47.5%, according to a market source.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Goldman Sachs & Co. LLC are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $112.5 million.

Bandwidth plans to price $250 million of seven-year convertible notes with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 35% to 40%, according to a market source.

Morgan Stanley and JPMorgan are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $37.5 million.

Invacare plans to price $100 million of five-year convertible notes with price talk for a coupon of 3.75% to 4.25% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

Morgan Stanley is the bookrunner for the Rule 144A offering, which carries a greenshoe of $15 million.

BlackLine in focus

BlackLine plans to sell $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 volatile

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 notes were strong out of the gate. They traded as high as 102 and expanded about 0.5 point dollar-neutral.

However, the notes dropped below par as stock got crushed heading into the afternoon.

The notes were changing hands at 98.75 in the late afternoon.

While below par, the notes held onto some of their dollar-neutral gains and were seen up about 0.25 point on hedge, a source said.

Vocera’s stock traded to a high of $44.80 and a low of $42.41 before closing the day at $43.03, a decrease of 3.41%.

Avid flat

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.

While the notes were also strong early in the session, they were largely flat heading into the market close.

The notes were trading in a tight range of 100 to 100.5 in the late afternoon.

“They’ve basically done nothing,” a source said.

Avid’s stock traded to a high of $16.62 and a low of $15.72 before closing the day at $16.21, an increase of 1.25%.

Itron outperforms

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 in the secondary space.

They expanded more than 2.5 points dollar-neutral early in the session and were still pushed out about 2 points dollar-neutral heading into the market close, sources said.

Itron’s stock traded to a high of $92.00 and a low of $89.35 before closing the day at $91.36, a decrease of 2.41%.

Mentioned in this article:

Avid Bioservices Inc. Nasdaq: AVID

Bandwidth Inc. Nasdaq: BAND

BlackLine Inc. Nasdaq: BL

Invacare Corp. NYSE: IVC

Itron Inc. Nasdaq: ITRI

Oak Street Health Inc. NYSE: OSH

Vocera Communications Inc. NYSE: VCRA

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