Morning Commentary: Mirum Pharmaceuticals convertible notes offering emerges

By Abigail W. Adams

Portland, Me., April 12 – The convertibles primary market returned to action on Wednesday with one new offering on deck.

Mirum Pharmaceuticals Inc. plans to price $200 million of six-year convertible notes after the market close on Wednesday with price talk for a fixed coupon of 4% and a fixed initial conversion premium of 32.5%.

The deal was heard to be in the market with assumptions of an 800 basis points credit spread and a 43% vol., a source said.

Using those assumptions, the deal looked 3.45 points cheap, a source said.

The deal appeared to be presold, sources said.

Mirum Pharmaceuticals is a speculative company with a market cap of $857 million.

While the company has no earnings, it also has no debt, a source said.

“This is good,” a source said. “We need new paper.”

The deal launched on a green start for equity and credit markets, which initially responded favorably to the latest Consumer Price Index report.

The report came in largely as expected with the overall CPI print 5%, below the 5.1% forecast, and the core CPI print 5.6%, in line with expectations.

While equity indexes launched the day strongly, they gave back much of their early gains to turn mixed shortly before 11 a.m. ET with the Dow Jones industrial average up 57 points, or 0.18%, the S&P 500 index up 0.17%, the Nasdaq Composite index was down 0.09% and the Russell 2000 index up 0.19%.

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