Immunocore on deck; BrightSpring losses mount; SoFi convertible notes jump; Lucid lower

By Abigail W. Adams

Portland, Me., Jan. 29 – The convertibles primary market saw an active start to the week on Monday with one deal on deck.

Immunocore Holdings plc plans to price $300 million of six-year convertible notes after the market close on Tuesday with price talk for a coupon of 2.5% to 3% and an initial conversion premium of 30% to 35%, according to a market source.

J.P. Morgan Securities LLC is bookrunner for the Rule 144A offering, which carries a greenshoe of $45 million.

Meanwhile, the secondary market saw a quiet start to the week as markets stare down the Federal Open Market Committee’s Wednesday announcement and a heavy week of earnings.

Equity indexes were flat early in the session but gained steam to close with gains on a strong day for the Treasury market with yields falling across the curve.

The Dow Jones industrial average closed Monday up 224 points, or 0.59%, the S&P 500 index closed up 0.76%, the Nasdaq Composite index closed up 1.12% and the Russell 2000 index closed up 1.67%.

BrightSpring Health Services Inc.’s 6.75% tangible equity units were volatile on Monday after their disastrous trading debut.

While slightly improved early in the session, the notes closed the day in the red with BrightSpring’s newly listed stock also adding to its losses.

Convertible bond trading was light with $55 million on the tape about one hour into the session and $311 million on the tape about one hour before the market close.

While the broader market was quiet, earnings-related news sparked some large movements in outstanding issues.

SoFi Technologies Inc.’s 0% convertible notes due 2026 were in focus with the notes popping alongside stock after an earnings beat.

Lucid Group Inc.’s 1.25% convertible notes due 2026 were lower in heavy volume despite a strong day for the company’s stock.

BrightSpring volatile

BrightSpring’s 6.75% tangible equity units were volatile on Monday after their disastrous trading debut.

While slightly improved early in the session, the units bled into the close as BrightSpring’s stock added to losses.

The $50-par equity units were trading at $45.50 early Monday, an increase of $0.50 or 1.11%.

However, they closed the day at $44.50, a decrease of $0.50 or 1.11%.

BrightSpring’s stock traded to a high of $11.21 and a low of $10.50 before closing at $10.56, off 4%.

The units priced at $50 alongside BrightSpring’s IPO of 53.3 million shares, which priced at $13 per share.

Demand for the units was tepid with investors balking at the early valuation of the heavily debt-ridden company with the IPO initially marketed in the $15 to $18 range.

While pricing came well below the low end of the range, $11 was the price target where there was demand, sources said.

It was the level stock plunged to on its trading debut last Friday with the equity units closing at $45 and stock closing at $11.

SoFi’s earnings

SoFi’s 0% convertible notes due 2026 popped alongside stock in heavy volume after an earnings beat on Monday.

The 0% convertible notes jumped 4 points outright.

The notes were trading at 85.625 with a yield of about 5.875% early in the session, according to a market source. They were changing hands at 85.5 in the late afternoon.

There was $18 million in reported volume with the notes among the top traders in the secondary space.

SoFi’s stock traded to a low of $8.62 and a high of $9.45 before closing at $9.16, an increase of 20.21%.

SoFi reported earnings per share of 4 cents with the company posting its first quarterly profit.

While earnings per share were largely in line with expectations, the company posted revenue of $594.24 million, which beat expectations for revenue of $571.51 million.

Lucid lower

Lucid’s 1.25% convertible notes due 2026 were lower in heavy volume on Monday despite a strong day for the company’s stock.

The 1.25% convertible notes were down 1.5 points outright early in the session although they pared their losses as the session progressed to close down 0.5 point.

The notes traded as low as 38.5 early in the session and were changing hands at 39.5 in the late afternoon, sources said.

They yield was about 37.375%.

There was $15 million in reported volume.

While not equity sensitive, Lucid’s stock had a strong session and closed at $3.37, an increase of 27.17%.

Mentioned in this article:

BrightSpring Health Services Inc. Nasdaq: BTSG; BTSGU

Lucid Group Inc. Nasdaq: LCID

SoFi Technologies Inc. Nasdaq: SOFI

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