Tilray offering eyed; Nutanix jumps on earnings beat; DISH rises on wireless chatter

By Abigail W. Adams

Portland, Me., May 25 – While most had given up hope for new deal activity, the convertibles primary market had one deal up its sleeve.

In an overnight offering set to price shortly after its announcement, Tilray Brands, Inc. plans to sell $150 million of four-year convertible notes in a refinancing deal.

Price talk is for a coupon of 5% to 5.25% and a fixed initial conversion premium of 12.5%, according to a market source.

BofA Securities Inc. and Jefferies LLC are bookrunners for the Securities and Exchange Commission-registered offering, which carries a greenshoe of $22.5 million.

Meanwhile, it was a relatively active session in the secondary space as earnings and topical news jumpstarted activity in outstanding issues.

Equity indexes were mixed on Wednesday as investors weighed U.S. debt ceiling negotiations against blowout earnings from the bellwethers of tech.

Nvidia Corp.’s earnings propelled the tech-heavy Nasdaq to a more than 1% gain in early trading while value and small-cap stocks underperformed.

The Dow Jones industrial average closed Thursday down 35 points, or 0.11%, the S&P 500 index closed up 0.88%, the Nasdaq Composite index closed up 1.71% and the Russell 2000 index closed down 0.70%.

There was $76 million in reported convertible bond trading volume about one hour into the session and $448 million on the tape about one hour before the market close.

Investment-grade issues continued to dominate activity in the space. However, topical and earnings-related news sparked the largest movements.

Nutanix Inc.’s 0.25% convertible notes due 2027 made large outright gains as stock soared following a large earnings beat.

DISH Network Corp.’s beleaguered convertible notes (B3/CCC-) were also making large outright gains following media reports that the company was in talks to sell wireless plans through Amazon.

JetBlue Airways Corp.’s 0.5% convertible notes due 2026 were active although with little movement in price after American Airlines’ chief financial officer stated there would be no earnings impact from the dissolution of its Northeast Alliance with JetBlue.

Nutanix jumps

Nutanix’s 0.25% convertible notes due 2027 made strong outright gains on Thursday with the cloud computing company among those in tech that have trounced analyst’s earnings expectations.

The 0.25% notes jumped 4 points outright with stock up 17%.

They were changing hands at 87 in the late afternoon.

There was $20 million in reported volume.

Nutanix’s stock traded to a low of $28 and a high of $29.89 before closing at $29.68, up 16.80%.

Stock jumped after the company announced earnings per share of 4 cents versus analyst expectations for earnings per share of 3 cents.

Revenue was $449 million versus analyst expectations for revenue of $433 million.

DISH gains

DISH’s badly battered convertible notes were on the rise on Thursday following media reports the company was in talks to sell its wireless plans through Amazon.

The soon-to-mature 2.375% convertible notes due March 15, 2024 rose 2.5 points in early trading although they came in as the session progressed.

The 2.375% notes were trading at 87.25 early in the session with a yield of 20.625%, according to a market source.

They fell back to 86.5 with the yield rising to about 21.875% in the late afternoon.

There was $10 million in reported volume.

DISH’s 3.375% convertible notes due 2026 jumped 2.5 points outright to 46.5 in the late afternoon with the yield 31%, according to a market source.

There was $5 million in reported volume.

DISH’s 0% convertible notes due 2025 rose 2 points to 46.5 with the yield about 32.375%.

There was $3 million in reported volume.

DISH’s stock traded to a low of $6.55 and a high of $7.44 before closing at $6.67, an increase of 7.06%.

The downtrodden notes were lifted on media reports that the satellite broadcaster was in talks to sell plans to its wireless network through Amazon.

DISH has become a highly speculative name with its capital structure severely damaged by a ransomware attack in February that wreaked havoc on its services and resulted in a large loss of subscribers.

Market players have been questioning DISH’s ability to meet its looming maturities with its 2.375% convertible notes the first in its debt pile to come due.

However, investor sentiment toward the company has improved recently with the market responding favorably to recent headlines that DISH CEO Charlie Ergen was fundraising in Dubai.

JetBlue active

JetBlue’s 0.5% convertible notes due 2026 were active although with little movement in price on Thursday.

The 0.5% notes continued to trade on a 77-handle with the notes wrapped around 77.5 in the late afternoon, according to a market source.

The yield was about 9.75%.

There was $11 million in reported volume.

JetBlue’s stock traded to a low of $6.77 and a high of $6.94 before closing at $6.83, up 1.04%.

The activity in the notes may have been sparked by comments on Thursday from American Airlines’ CFO, who stated at a conference that the dissolution of its Northeast Alliance with JetBlue would have no earnings impact.

In a recent win for the Justice Department, a federal court ruled that American and JetBlue must unwind their partnership for travel in the Northeast, or the Northeast Alliance, due to anti-competition concerns.

Mentioned in this article:

DISH Network Corp. Nasdaq: DISH

JetBlue Airways Corp. Nasdaq: JBLU

Nutanix Inc. Nasdaq: NTNX

Tilray Brands Nasdaq: TLRY

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