BlackLine eyed; Alteryx, Mesa Labs expand on debut; Ironwood, CorEnergy, Clovis price

By Abigail W. Adams

Portland, Me., Aug. 8 – The convertibles primary market continued to roll out new deals at a dizzying pace with four issuers pricing a combined $1.3 billion over six tranches prior to the market open on Thursday, $250 million pricing after the market close and one deal for $435 million imminent.

Alteryx Inc. priced $700 million in two tranches, Ironwood Pharmaceuticals, Inc. priced an upsized $350 million in two tranches, CorEnergy Infrastructure Trust, Inc. priced $100 million of six-year convertible notes, and Mesa Laboratories Inc. sold $150 million of six-year convertible notes.

The new paper jumpstarted activity in the secondary space with more than $800 million in reported volume heading into the market close.

Some deals were performing better than others. However, all were trading up in the secondary space.

While the new paper flooded the secondary market, two more deals were on deck.

Late in the day, Clovis Oncology, Inc. priced an upsized $250 million of five-year notes.

And, BlackLine Inc. was planning to price $435 million of five-year convertible notes after the market close on Thursday.

BlackLine was heard to have tightened price talk during bookbuilding while Clovis Oncology’s new offering was brought to the market via reverse inquiry.

Alteryx expands

Alteryx priced a $350 million tranche of five-year convertible notes and a $350 million tranche of seven-year convertible notes after the market close on Wednesday.

The five-year convertible notes priced at par with a coupon of 0.5% and an initial conversion premium of 50%.

Price talk was for a coupon of 0.25% to 0.75% and an initial conversion premium of 45% to 50%, according to a market source.

The seven-year convertible notes priced at par with a coupon of 1% and an initial conversion premium of 50%.

Price talk was for a coupon of 0.75% to 1.25% and an initial conversion premium of 45% to 50%.

The new paper was performing well in the secondary with both tranches trading up, a market source said.

Both tranches were solidified around 103 and expanded about 1.5 points dollar-neutral, sources said.

Alteryx stock closed Thursday at $132.86, an increase of 5.24%.

Ironwood comes in

Ironwood priced an upsized $175 million tranche of five-year convertible notes and an upsized $175 million tranche of seven-year convertible notes at the midpoint of talk prior to the market open on Thursday, according to a company news release.

The five-year tranche priced at par with a coupon of 0.75% and an initial conversion premium of 37.5%.

Price talk had been for a coupon of 0.625% to 1.125% and an initial conversion premium of 35% to 40%.

The seven-year tranche priced at par with a coupon of 1.5% and an initial conversion premium of 37.5%.

Price talk had been for a coupon of 1.25% to 1.75% and an initial conversion premium of 35% to 40%.

The tranches started the day strong but came in as the session progressed.

The shorter duration tranche was faring better than the longer duration tranche early in the session.

The 0.75% notes were changing hands between 100.5 and 101 with stock unchanged to down slightly early in the session. They expanded about 1 point dollar-neutral, a market source said.

The 1.5% convertible notes were trading between 100.25 and 100.75 on an outright basis.

However, both notes were wrapped around 100.25 versus a stock price of $9.65 in the afternoon.

Ironwood stock traded as high as $9.82 and as low as $9.38 before closing the day at $9.57, a decrease of 1.75%.

Mesa skyrockets

Mesa Laboratories priced $150 million of six-year convertible notes after the market close on Wednesday at par with a coupon of 1.375% and an initial conversion premium of 35%.

Pricing came at the rich end of talk for a coupon of 1.375% to 1.875% and an initial conversion premium of 30% to 35%, according to a market source.

The 1.375% notes priced concurrently with a secondary stock offering, which priced at $210.00 per share.

The 1.375% notes skyrocketed in the secondary space.

They were changing hands around 104 on an outright basis early in the session and rose to 105 in the afternoon.

They expanded 2.5 points to 3 points dollar-neutral, source said.

Mesa stock traded as high as $226.74 and as low as $211.00 before closing the day at $223.76, an increase of 0.79%.

CorEnergy wall-crossed

CorEnergy Infrastructure priced $100 million of six-year convertible notes after the market close on Wednesday at the midpoint of talk with a coupon of 5.875% and an initial conversion premium of 13%.

Price talk had been for a coupon of 5.5% to 6% and an initial conversion premium of 12.5% to 17.5%, according to a market source.

The deal was wall-crossed and was not active in the secondary, a market source said. However, the notes were seen trading up to 101.5 with stock up on Thursday.

CorEnergy stock closed the day at $45.97, an increase of 3.89%.

More Clovis

Clovis priced $250 million of 4.5% five-year convertibles late in the day, upsized from $225 million.

The initial conversion premium was reported to be 25%.

Price talk was for a coupon of 4% to 4.5% and an initial conversion premium of 25% to 30%.

Sources pegged assumptions at 1,200 bps over Libor and a 45% vol., which modeled 3 points to 4.5 points cheap at the midpoint of talk.

However, the deal was heard to be the result of reverse inquiry and had a limited audience, sources said.

Proceeds will be used, in part, to repurchase a portion of Clovis’ 2.5% convertible notes due 2021 in privately negotiated transactions.

While not active, Clovis’ outstanding convertible notes were expanding on the news.

The 2.5% notes were up about 5 points and the 1.25% convertible notes due 2025 were up about 1.5 points, a market source said.

BlackLine tightens talk

BlackLine plans to price $435 million of five-year convertible notes after the market close on Thursday.

Talk was heard to have tightened during bookbuilding to a fixed coupon of 0%, according to a market source.

Initial price talk had been for a coupon of 0% to 0.5% and an initial conversion premium of 32.5% to 37.5%.

Underwriters were marketing the deal with assumptions of 300 bps over Libor and a 40% vol.

Using those assumptions, sources pegged the deal between 2 points and 2.25 points cheap at the midpoint of initial price talk.

Mentioned in this article:

Alteryx Inc. NYSE: AYX

BlackLine Inc. Nasdaq: BL

Clovis Oncology, Inc. Nasdaq: CLVS

CorEnergy Infrastructure Trust, Inc. NYSE: CORR

Ironwood Pharmaceuticals, Inc. Nasdaq: IRWD

Mesa Laboratories Inc. Nasdaq: MLAB

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