Morning Commentary: Immunocore convertible notes offering eyed; Cardlytics gains

By Abigail W. Adams

Portland, Me., Jan. 30 – The convertibles primary market had one deal on deck on Tuesday with Immunocore Holdings plc’s $300 million offering of six-year convertible notes set to price after the market close.

The deal looked cheap based on underwriters’ assumptions and was expected to do well.

The new deal comes on a risk-off day for the markets with equities giving back some gains from Monday’s strong close as the Federal Open Market Committee commences its meeting.

The Dow Jones industrial average was down 44 points, or 0.11%, the S&P 500 index was down 0.17%, the Nasdaq Composite index was down 0.50% and the Russell 2000 index was down 0.85% shortly before 11 a.m. ET.

The secondary space was relatively active early in the session with $90 million on the tape with a wide range of names in play.

Cardlytics Inc.’s 1% convertible notes due 2025 were in the spotlight with the notes posting strong gains after the company announced the resolution of a shareholder dispute and preliminary earnings.

Immunocore in focus

Immunocore plans to price $300 million of six-year convertible notes after the market close on Tuesday with price talk for a coupon of 2.5% to 3% and an initial conversion premium of 30% to 35%.

The deal was heard to be in the market with assumptions of 500 basis points over SOFR and a 40% vol.

Using those assumptions, the deal looked about 2.75 points cheap at the midpoint of talk, a source said.

The deal was heard to be partially wall-crossed and expected to do well.

Immunocore’s stock was taking a hit on the heels of the offering and traded down to $65.24, a decrease of 9.51%, shortly before 11 a.m. ET.

Cardlytics improves

Cardlytics’ 1% convertible notes due 2025 were in focus early Tuesday with the notes posting gains as stock soared on the resolution of a shareholder dispute and on preliminary earnings.

The off-the-run issue was up another 1 point outright after a more than 4 point gain the previous session.

The notes traded up to 69 with the yield now 25.5%, according to a market source.

There was $6 million in reported volume.

Cardlytics’ stock traded up to $8.48, an increase of 17.87%, shortly before 11 a.m. ET.

Stock continued its meteoric rise after an almost 25% gain the previous session.

Cardlytics soared on Monday after the advertising platform announced that it had settled a dispute with the former shareholders of Bridg over Cardlytics’ acquisition of the company.

The company also released preliminary earnings with the anticipated positive adjusted EBITDA to allow for the extension of its credit facility to April 2025, according to a company news release.

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