International Financing Review March 7 2020^89STRUCTURED EQUITY CONVERTIBLESUNITED STATES
ENPHASE ENERGY POWERS AMBITIONS
WITH US$320m CBIntegrated alternative energy company
ENPHASE ENERGY signalled its ambitions last
WEEKûWITHûAû53MûlVE
YEARûCONVERTIBLEû
bond that achieved one of the most
aggressive pricing outcomes in recent
history.
Disruptions of products out of China are a
near-term distraction, while potentially
holding the opportunity for M&A due to
impaired valuations.
Enphase will end up paying a coupon of just
0.25% with investors eligible to convert at a
52.5% premium to reference, the midpoint of
0%–0.5% and 50%–55% marketed talk.
The company spent US$17.5m of the
proceeds raised on a derivative to offset
economic dilution to share prices above
US$106.94, a 100% premium to reference.
Enphase was a US$26.13 stock entering
the year and traded with an 8-handle a year
ago.
“There were a lot of investors that had
never heard of the company. They said: ‘Let
me get a research report to understand
THEMûBETTER vûSAIDûAûBANKERûINVOLVEDûh4HEû
COMPANYûCHECKEDûAûLOTûOFûBUZZWORDSv
Barclays and Goldman Sachs placed two-
thirds of the deal with outright, long-only
investors, including ESG-oriented investors
out of Europe even though the security is
not ESG- eligible.
Enphase shares rose 6% over the
Wednesday marketing to US$56.69 and
another 2.1% post-pricing on Thursday.
Enphase has a US$6bn market cap.
The credit spread was 325bp and 45
implied vol.
Microinverters, the company’s legacy
business, are a foundation to expand power
management throughout the household, to
include storage solutions for blackouts and
cloud-based software to manage power
delivered down to individual appliances, or
to a neighbour.Highlighting the speed of its turnaround,
Enphase came hat in hand to the CB market
INû!UGUSTûûWITHûAû53MûlVE
YEARû
that printed at a 4% coupon and 10%
conversion premium at the time, or US$5.55
a share.INFINERA DETERMINED TO TERM
OUT BORROWINGSINFINERA successfully termed out its capital
structure through the sale last week of a
US$200m seven-year convertible bond, but
paid a high cost to do so.
)NlNERAûSHARESûTANKEDûûONûTHEû
marketing of the CB on Wednesday to
US$5.89.
Sole bookrunner Goldman Sachs priced the
CB that evening at a 2% coupon and 30%
conversion premium, toward the investor-
friendly ends of 2%–2.5% and 27.5%–32.5%
talk.
Combined with US$402.5m 2.125% CB
that comes due in 2024, that is a lot of debt
FORû)NlNERA
4HEûNEWûlNANCINGûISûEARMARKEDûFORû
general corporate purposes, of which
)NlNERAûHASûMOREûTHANûMOSTûAFTERûHAVINGû
tapped multiple sources of liquidity.
)NlNERAûlNISHEDûTHEûFOURTHûQUARTERûWITHû
US$132.8m of cash but only after drawing
down US$25m on a separate vendor facility
ANDûlVEûCONSECUTIVEûQUARTERSûOFûWORKINGû
capital pull-throughs.
The optical networking gear maker also
needs cash in the near term to support the
upcoming commercial launch of its next-
generation 800 GB/second optical router,
expected to ship late this year with sales
ramping up in 2021.NANOSTRING REPAYS, TERMINATES
TERM LOAN WITH CBNANOSTRING TECHNOLOGIES, a maker of medical
equipment, landed an upsized US$200m of
proceeds on Wednesday from the sale of
lVE
YEARûPAPER
JP Morgan and Morgan Stanley launched
marketing ahead of the open on Wednesdayat a US$175m target size and price talk of
2.375%–2.875% and 37.5%–42.5% on the
coupon and conversion premium.
They bumped up the offering size by
US$25m to US$200m ahead of pricing that
evening at 2.625%, up 40%, the mid-point of
talk.
Nanostring used the proceeds to fully
repay the US$89m drawn on a senior term
loan, continuing a recent trend of
companies taking advantage of declining
interest rates to term out senior borrowings
with new CBs.EQUITY-LINKED DEALS WEEK ENDING: 6/3/2020Issuer Country Date Amount Greenshoe Tenor Coupon/YTM % Premium (%) Bookrunner(s)
GFL Environmental Canada 03/03/2020 US$775m US$116.3m 3y 6 20 JP Morgan, BMO CM, Goldman Sachs,
RBC CM, Scotiabank
Korian France 03/03/2020 €400m 7y 0.875 55 BNP Paribas, Morgan Stanley
BridgeBio Pharma US 03/04/2020 US$475m US$75m 7y 2.5 37.5 JP Morgan, BofA, Mizuho Securities,
Piper Sandler, KKR
EnPhase Energy US 03/04/2020 US$320m US$30m 5y 0.25 52.5 Barclays, Goldman Sachs
Infinera US 03/04/2020 US$200m US$30m 7y 2.5 30 Goldman Sachs
NanoString Technologies US 03/04/2020 US$200m US$30m 5y 2.625 40 JP Morgan, Morgan Stanley
Square US 03/02/2020 US$1bn US$150m 5y 0.125 50 Goldman SachsGLOBAL CONVERTIBLE OFFERINGS
BOOKRUNNERS: 1/1/2020 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)Including exchangeables and domestic offerings.
Source: Refinitiv SDC code: C91 Goldman Sachs 12 3,281.31 14.6
2 BofA 9 3,018.89 13.4
3 JP Morgan 12 2,695.44 12.0
4 Morgan Stanley 11 2,431.85 10.8
5 Barclays 5 1,171.71 5.2
6 Citigroup 6 1,167.55 5.2
7 Wells Fargo 2 848.86 3.8
8 BNP Paribas 3 701.80 3.1
9 UBS 3 565.78 2.5
10 CICC 3 557.34 2.5
Total 53 22,460.14GLOBAL CONVERTIBLE OFFERINGS – US
BOOKRUNNERS: 1/1/2020 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)Source: Refinitiv SDC code: C9a1 Goldman Sachs 9 2,665.53 23.5
2 BofA 8 2,646.86 23.3
3 JP Morgan 6 1,602.20 14.1
4 Morgan Stanley 6 1,193.03 10.5
5 Wells Fargo 2 848.86 7.5
6 Barclays 3 693.33 6.1
7 Jefferies 2 248.75 2.2
8 Truist Financial Corp 2 151.36 1.3
9 Citigroup 2 151.36 1.3
10 RBC 1 150.00 1.3
Total 19 11,357.9810 b IFR Struct Eq 2323 p 88 - 89 .indd 89 06 / 03 / 2020 19 : 33 : 10