GoPro on deck; Liberty exchangeables eyed; Pinduoduo skyrockets on debut; Guardant gains continue

By Abigail W. Adams

Portland, Me., Nov. 18 – The convertibles primary market continued to roll out offerings with two new deals on deck and another megadeal making its aftermarket debut.

GoPro Inc. plans to price $100 million in five-year convertible notes after the market close on Thursday with price talk for a coupon of 1.25% to 1.75% and an initial conversion premium of 30% to 35%, according to a market source.

J.P. Morgan Securities LLC and Oppenheimer& Co. Inc are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $25 million.

Liberty Broadband Corp. plans to price $650 million of 30-year exchangeable notes tied to Charter Communications Inc.’s class A common stock after the market close on Wednesday.

The deal looked cheap and was heard to be in demand during bookbuilding with the offering believed to be upsizing, sources said.

Meanwhile, new paper was in focus in the secondary space.

Pinduoduo Inc.’s megadeal skyrocketed on its aftermarket debut despite the deal’s tight pricing.

Guardant Health Inc.’s newly priced 0% convertible notes due 2027 remained active with the notes continuing to gain.

Liberty/Charter eyed

Liberty Broadband plans to price $650 million of 30-year exchangeable notes tied to Charter after the market close on Wednesday with price talk for a coupon of 1.125% to 1.625% and an initial exchange premium of 37.5% to 42.5%, according to a market source.

Underwriters were marketing the deal with assumptions of 200 basis points over Libor and a 24% vol., which looked cheap, a source said.

Another source pegged assumptions at 250 basis points over Libor and a 27% vol., which modeled out to 2.84 points cheap at the midpoint of talk.

The latest offering from Liberty was an effort to monetize Liberty Broadband’s stake in Charter, a source said.

While some sources did not find the deal very exciting, it was heard to be in demand during bookbuilding with the offering upsizing.

Pinduoduo skyrockets on debut

Pinduoduo’s megadeal skyrocketed in the secondary space with the demand seen during bookbuilding following the notes into the aftermarket.

The Shanghai-based e-commerce company priced $1.75 billion of five-year convertible notes prior to the market open on Wednesday at par with a coupon of 0% and an initial conversion premium of 52.5%.

Pricing came in line with talk for a fixed coupon of 0% and richer than initial talk for an initial conversion premium of 40% to 50%, according to a market source.

Concurrently with the convertible notes offering, the company priced a secondary offering of 28.7 million American Depositary Shares at $125.00 per share.

While several sources felt the pricing of the notes was too rich, the notes were in demand.

The 0% notes traded as high as 104.375 during Wednesday’s session and were on a 103-handle heading into the market close.

The notes expanded upwards of 3.33 points and even more if it was hedged against the secondary offering, a source said.

Pinduoduo ADSs traded to a high of $134.49 and a low of $128.80 before closing the day at $132.38.

Guardant day 2

Guardant Health’s newly priced 0% convertible notes due 2027 remained active their second day in the secondary space with the notes continuing to gain.

The 0% notes traded up another 2 points outright with stock up about 1.5%.

The notes were changing hands just shy of 104 versus an equity price of $108.28, according to a market source.

They expanded another 0.5 to 0.625 points dollar-neutral, a source said.

Guardant Health stock traded to a high of $111.14 and a low of $105.55 before closing the day at $107.96, an increase of 1.39%.

The notes also performed well on their aftermarket debut on Tuesday with the notes jumping to a 102-handle and expanding 1.5 points dollar-neutral, sources said.

Mentioned in this article:

Charter Communications Inc. Nasdaq: CHTR

Guardant Health Inc. Nasdaq: GH

Pinduoduo Inc. Nasdaq: PDD

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