Morning Commentary: Li Auto, Ionis eyed; Verint Systems, Century Aluminum price

By Abigail W. Adams

Portland, Me., April 7 – New paper was in focus on Wednesday with two deals totaling $1.25 billion set to price after the market close and two deals totaling $350 million making their aftermarket debuts.

Ionis Pharmaceuticals Inc. plans to price $500 million in five-year convertible notes and Li Auto Inc. plans to price $750 million in seven-year convertible notes after the market close on Wednesday.

The deals continued to model cheap based on underwriters’ assumptions.

While the deals continued to be marketed with aggressive coupon ranges, conversion premium ranges began to cheapen and there were other concessions in terms of call and put options.

Meanwhile, new paper from Verint Systems Inc. and Century Aluminum Co. priced.

Ionis eyed

Ionis Pharmaceuticals plans to price $500 million in five-year convertible notes after the market close on Wednesday with price talk for a fixed coupon of 0% and an initial conversion premium of 30% to 35%, according to a market source.

The deal was being marketed with assumptions of 350 bps over Libor and a 32% vol., according to a market source.

Using those assumptions, the deal looked 2.79 points cheap at the midpoint of talk.

The notes are non-callable, which was a bonus to the offering, a source said

Li Auto eyed

Li Auto plans to price $750 million in seven-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 27.5% to 32.5%, according to a market source.

The deal was being marketed with assumptions of 750 bps over Libor and a 45% vol., according to a market source.

Using those assumptions, the deal looked 3.38 points cheap at the midpoint of talk, a source said.

The notes are non-callable except for a tax redemption and are putable on May 1, 2024 and May 1, 2026.

Century Aluminum trades up

Century Aluminum priced $75 million of seven-year convertible notes after the market close on Tuesday at par with a coupon of 2.75% and an initial conversion premium of 22.5%, according to a company news release.

Pricing came at the cheap end of talk for a coupon of 2.25% to 2.75% and at the midpoint of talk for an initial conversion premium of 20% to 25%, according to a market source.

While volume in the small issue was light, there were some small trades on the tape at 102.5 and a large million plus trade at 104.5, a source said

Verint Systems prices

Verint Systems priced an upsized $275 million of five-year convertible notes after the market close on Tuesday at par at the midpoint of talk with a coupon of 0.25% and an initial conversion premium of 32.5%, according to a company news release.

Price talk was for a coupon of 0% to 0.5% and an initial conversion premium of 30% to 35%, according to a market source.

The new paper was not seen on Trace early in the session.

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