Morning Commentary: Nikola convertibles on tap; Repligen exchanges, new notes trade up

By Abigail W. Adams

Portland, Me., Dec. 7 – The convertibles primary market remained active on Thursday with one deal on deck, although sources were skeptical about whether the deal could get done.

Nikola Corp. plans to price $200 million of green convertible notes due Dec. 15, 2026 after the market close on Thursday with price talk for a coupon of 7.75% to 8.25% and an initial conversion premium of 20% to 25%, according to a market source.

Concurrently, the company is pricing a follow-on offering of $100 million of common stock.

The offering was not one that sources expressed an interest in with Nikola a scandal-plagued company that many have on bankruptcy watch.

“Gotta be a death spiral,” a source said.

Nikola’s stock sank on the concurrent offerings with stock now trading firmly below the $1 Nasdaq listing requirement after wavering on either side of $1 since mid-November.

Nikola’s stock traded down to $0.80, a decrease of 18.36%, shortly before 11 a.m. ET.

While sources questioned the ability of Nikola to complete its Securities and Exchange Commission-registered offering, $600 million in new supply made its way into the secondary space via an exchange offering.

Repligen Corp. sold $600 million of new 1% convertible notes due 2028 in privately negotiated exchange and subscription agreements with holders of its 0.375% convertible notes due 2024 and new investors.

The company issued $309.9 million of 1% notes for $217.7 million in principal of the company’s outstanding 0.375% notes due 2024.

The company also sold an additional $290.1 million of the 1% notes for cash, according to a market source.

The new 1% notes were strong on debut and were marked at 103 bid, 104 offered versus a stock price of $156.20 pre-market open, a source said.

Repligen’s stock was trading at $162.09 shortly before 11 a.m. ET.

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