Zip Co prepares convertible bond raising
Apr 14, 2021 – 2.56pmZip Co’s shares are flying again - and investors are waiting for the company to make the most of it.
The buy now, pay later group’s stock soared on Tuesday thanks to better than expected transaction volume and customer growth in the March quarter, and the heavy buying spilled over into Wednesday morning.
Zip Co co-founder Peter Gray said his company’s March quarter results were “super pleasing”. Louise Kennerley
The positivity has fund managers wondering whether Zip will take advantage of the heat and tap capital markets with a capital raising.
Bankers reckon Zip would be a prime candidate for a convertible notes offering. It has a blue sky-type growth story to ensure the notes can be issued at a substantial premium, and the volatility required to keep hedge funds interested and the convertible notes liquid.
Should it go down the convertible notes offering path, it would follow bigger rival Afterpay, which had little trouble raising $1.5 billion via Citi, Goldman Sachs and JPMorgan in March. Afterpay’s convertible notes were mostly sold to institutional investors in Asia.
RELATED QUOTES
Z1PZip Co
$9.600 -1.34%View Z1P related articlesApr 20Oct 20Apr 210.0007.00014.000Updated: Apr 14, 2021 – 2.58pm. Data is 20 mins delayed.Tech darling Xero and travel companies Webjet and Flight Centre have also been swamped with buyers during convertible notes deals in the past six months or so.
Of course Zip’s likely broker line up would be different to rival Afterpay’s. Zip, which is soaring on the back of growth in its US business QuadPay, is close to Bank of America, while upstart investment bank Jarden is also understood to be eyeing a role.
Hitting a high note
Indeed Bank of America helped Zip with another convertible note raising last year. That time it was a select $200 million deal with US based Heights Capital Management, which is part of Susquehanna International Group, to fund its stake in QuadPay.
Heights Capital Management’s notes are well into the money. They had an initial convertible price of $5.53284 a share, which was a 50 per cent premium to Zip’s then share price. The stock was trading at $9.88 at lunchtime on Wednesday.
Any deal by Zip would be opportunistic. The company said on Tuesday that it had ample liquidity under its existing facilities, particularly in Australia. As at March 31, its Australian arm had drawn $1.38 billion of $2.18 billion available.
The fast-growing US business had drawn $US111.9 million of a $US150 million off-balance sheet funding facility that has Goldman Sachs as its senior lender.
Renewed buying in Zip Co shares comes after a heavy sell-off through the second half of February and March. The stock traded close to $14 in February, before dropping to below $8 by the end of March.
- Forums
- ASX - By Stock
- Ann: Pause in Trading
Zip Co prepares convertible bond raisingSarah Thompson, Anthony...
-
- There are more pages in this discussion • 77 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add ZIP (ASX) to my watchlist
|
|||||
Last
$2.14 |
Change
-0.050(2.28%) |
Mkt cap ! $2.777B |
Open | High | Low | Value | Volume |
$2.15 | $2.17 | $2.10 | $11.51M | 5.376M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
15 | 129874 | $2.13 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$2.14 | 113666 | 36 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
16 | 127342 | 2.140 |
24 | 203008 | 2.130 |
28 | 354802 | 2.120 |
28 | 261029 | 2.110 |
36 | 394736 | 2.100 |
Price($) | Vol. | No. |
---|---|---|
2.150 | 180483 | 42 |
2.160 | 287878 | 37 |
2.170 | 205437 | 26 |
2.180 | 205211 | 28 |
2.190 | 312559 | 16 |
Last trade - 12.23pm 22/08/2024 (20 minute delay) ? |
Featured News
ZIP (ASX) Chart |