Morning Commentary: Bloom Energy convertible notes offering rounds out active week

By Abigail W. Adams

Portland, Me., May 11 – The convertibles primary market stood poised to round out an active week with one last sizable offering.

Bloom Energy Corp. plans to price $500 million of five-year convertible notes after the market close on Thursday with price talk for a coupon of 2.75% to 3.25% and an initial conversion premium of 37.5% to 42.5%.

The deal was heard to be in the market with assumptions of 500 basis points over SOFR and a 42% vol.

The deal looked cheap based on underwriters’ assumptions with the offering modeling out to 3.375 points to 3.5 points cheap at the midpoint of talk, sources said.

If priced at the current amount, the deal will lift the primary market’s weekly tally to $2.725 billion, marking the third busiest week of the year for new deal activity.

While rates and depressed stock prices have kept potential issuers at bay, companies are beginning to pull the trigger on deals, particularly when it comes to refinancing short-dates maturities, a source said.

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