To facilitate the transaction, lead
managers provided asset swaps at 70bp–
80bp for the five-year and 90bp–100bp for
the seven-year.
In the grey market, the five-year bonds
changed hands at the offer price plus 0.25
and the seven-year bonds at the offer price
plus 0.75 immediately after launch.
JP Morgan, Morgan Stanley and Nomura
were active bookrunners for the deal.
Goldman Sachs and Mizuho were passive
bookrunners.SOUTH AFRICA
SIBANYE-STILLWATER AND EI GROUP
LAUNCH BUYBACKSSouth African metals miner SIBANYE-
STILLWATER has bought back US$50m of its
US$450m 1.875% 2023 convertible bonds.
The bonds were purchased at 75%
following a modified Dutch auction that
had guidance of 74%–77%.
Based on a September 11 settlement
date, accrued interest totals US$1,718.75
per US$200,000 of bonds, or 0.86%.
Sibanye-Stillwater has also launched
tenders for retiring up to US$350m of its
6.125% bonds due June 22 2022 and 7.12%
bonds due June 27 2025.
Barclays was dealer manager.
There was also the launch of a £97m buyback
of EI GROUP’s (formerly Enterprise Inns) 3.5% 2020
CBs on Thursday evening. The CBs will be
tendered for cash at 105%, with the buyback to
close at 5pm on Thursday September 13.
BNP Paribas and Deutsche Bank are dealer
managers.
Ei Group is also issuing US$150m of
high-yield senior notes due 2024, with
funds intended to finance the buyback but
can be deployed elsewhere.UNITED STATES
RETROPHIN RESETS DILUTION
WITH US$240m SEVEN-YEAR CBFollowing the launch of a Phase III trial this
summer, RETROPHIN landed an upsized,
US$240m from the sale of a seven-year CB
on Wednesday.
In addition to funding development, the
company used the financing to cap stock
dilution on an existing CB that is in the money
and is due to mature in May 2019. It spent
US$40m to repurchase US$23m principal of
the 2019 notes, or 175% including accrued, a
roughly six-point premium.
The 2019 bonds settle entirely in stock,
while the new seven-year is par-cash settle
and residual in stock.
“They are at a different time in their
lifecycle. When they issued the 4.5% notes [in
2014], they were looking to equitise,” said
one banker involved in the underwriting.
Jefferies and Barclays, the joint
bookrunners, responded to strong demand
by upsizing to US$240m ahead of pricing at
2.5%, up 35%, the midpoint of talk on a deal
originally sized at US$200m. They were
more than three-times oversubscribed with
allocations slanted towards outright, long-
only investors.
Retrophin shares fell 10.6% on the
Tuesday marketing to US$28.74, nearly
double the US$17.41 price 4.5% noteholders
are eligible to convert into the underlying.
Retrophin, which finished the June quarter
with US$255.7m of cash and equivalents, is
using proceeds to fund a Phase III trial on a
drug to treat a neurological disorder known
as pantothenate kinase-associated
neurodegeneration (PKAN). It expects to
report top-line data from the study in the
second half of 2019.Jefferies, along with Nomura, placed a
US$125m, five-year CB on Wednesday for IT
consultant PERFICIENT at a 2.375% coupon and
25% conversion premium, the investor-
friendly ends of talk.
Perficient bought back US$40m of stock
on the deal and spent another US$7.5m on a
derivative to offset dilution consideration to
US$46.62, a 55% premium to reference.
Perficient shares rose 4.6% on the
Wednesday marketing to US$30.08.
The company also repaid US$40m of the
US$56m drawn on its revolving credit facility.INFINERA BUILDS FLEXIBILITY INTO
US$350m CBINFINERA moved to fund its US$430m cash-
and-stock purchase of privately held Coriant
through the sale of a new, upsized US$350m
six-year CB on Thursday.
The optical networking firm, which
agreed to the Coriant acquisition in July,
opted to structure the CB with flexibility to
take out the security if the acquisition does
not close.
Specifically, the company can redeem the
CB at 102 plus 75% of the conversion value if
the acquisition does not close by January 23,
though it still expects to close later this
month, on the original timetable.
The provision is standard on US-style,
acquisition-related CBs to manage dilution.
Morgan Stanley, acting as sole books,
increased the size of the CB from US$275m to
US$350m ahead of pricing at a 2.125% coupon
and 30% conversion premium, the midpoint of
1.875%–2.375% and 27.5%–32.5% talk.
Infinera shares fell 10.1% over the one-day
marketing to US$7.60, down from a high in
May of US$12.39.
The company cushioned the blow by
using a portion of the proceeds on a
derivative to offset dilution to share prices
above US$15.19, a 100% premium to
reference.
In July, Infinera agreed to acquire Coriant
for US$230m in cash and 21m shares issued
to Oaktree Capital, valuing the business at
just 0.5x 2017 EV-to-sales.
The purchase would nearly double the
size of the combined company with a hoped-
for US$250m in operating synergies targeted
over the next three years.
Vertical integration drives the synergies
estimate as does a more diverse base of Tier
1 customers, Infinera CEO Thomas Fallon
reiterated on the company’s second-quarter
earnings call last month.
“We’re entering this acquisition from a
strong position,” he said. “Our fully
refreshed product portfolio is driving
revenue growth and earning Infinera new
customers, with expected footprint
expansion in the second half of 2018.”98 International Financing Review September 8 2018CONVERTIBLE EQUITY LEGAL ADVISER TO
ISSUER, EMEA
1/1/2018 TO DATE
No of Total Share
Legal adviser issues US$(m) (%)
1 Latham & Watkins 2 2,033. 0 2 0.2
2 Linklaters 3 1,246.3 12. 4
3 Bar & Karrer 2 805. 1 8. 0
4 White & Case 1 600 .0 6. 0
5 Clifford Chance 1 500 .0 5. 0
6 Allen & Overy 1 4 50.0 4 .5
7 Wachtell Lipton Rosen 1 402.5 4 .0
& Katz
8 Debevoise & Plimpton 1 250 .0 2.5
9 NautaDutilh 1 2 45.3 2. 4
10 Cleary Gottlieb Steen 1 17 4.0 1. 7
& Hamilton
Total 30 10,072.2
Including exchangeables and domestic.
Source: Thomson Reuters SDC code: AX7CONVERTIBLE EQUITY LEGAL ADVISER TO
MANAGER, EMEA
1/1/2018 TO DATE
No of Total Share
Legal adviser issues US$(m) (%)
1 Homburger 1 1,648.0 16. 4
2 Linklaters 4 88 9.7 8.8
3 Freshfields Bruckhaus 1 739 .0 7 .3
Deringer
4 Davis Polk & Wardwell 2 5 10.0 5. 1
5 Allen & Overy 1 500 .0 5. 0
=5 Simmons & Simmons 1 500 .0 5. 0
7 White & Case 3 4 53.2 4 .5
8 Cahill Gordon & Reindel 1 402.5 4 .0
=8 Cleary Gottlieb Steen 1 402.5 4 .0
& Hamilton
10 Latham & Watkins 1 330 .0 3.3
Total 30 10,072.2
Including exchangeables and domestic.
Source: Thomson Reuters SDC code: AX810 Equities and SE 2250 p81-98.indd 98 07/09/2018 20:19:33