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SPAC IPO Terms Tracker: More of the Same for September


SPAC IPO Terms Tracker: More of the Same for September

Sep 17, 2022 INTEL by sam.beattie

Terms Tracker for the Week Ending September 16th, 2022

Welcome to our weekly column where we discuss the findings from our IPO terms tracker based on the previous week’s pricings.

For the week ending September 16th, there were just two new S-1 registration statements, up from the zero seen last week, and zero IPOs, one less than the week prior. This week consisted of the first two new S-1s of the month and as we are about halfway to October, we may see similar numbers as last August. The total number of SPACs in registration remained unchanged at 116 while the total number of SPACs searching for targets took a deeper drop to 557 from 565 the week prior.

Breaking it down, the filed column gained two new S-1s and lost two due to registration withdrawals (RWs), while the searching column decreased due to two liquidations, and six deal announcements. It was another relatively light week for SPACs, however, we are still noticing a mild increase in amendments to S-1s with no changes to terms (in regard to the Terms Diffusion Tracker) which may be foreshadowing an increase in IPOs for the weeks ahead.

[Read here for a refresher on our methodology]

Terms Tracker Data

The Terms Diffusion Index dropped to 49.66 from 49.92 last week. The retraction was a result of four negative changes, three more than the week prior. TenX Keane Acquisition (TENK) shortened their time horizon from 12 to 9 months and increased their rights coverage from 1 for 1/10 to 1 for 2/10 – a more unusual term for rights coverage. Cetus Capital Acquisition Corp. (CETU) added rights coverage of 1 for 1/10 and overfunded from 102.0% to 102.5%.

So far, September has proven to be relatively moderate in terms of changes and volume for the Diffusion Index however we have started to notice a consistency in deal liquidations, which has become a contributor to the fluxing index. In terms of the overall SPAC market, it’s likely we will continue to see the long-standing trend of the year continue.

  • The Terms Diffusion Index oscillates around 50.0, assigning a 1.0 value to all positive changes, a 0.5 value to “no changes”, and a 0.0 value to negative changes. Therefore, readings above 50.0 would indicate SPAC terms were loosening on the week, while a reading below 50.0 signals tightening.

IPO Performances from Last Week

There were no IPOs this week leaving the monthly total of one IPO unchanged. As the weather begins to cool and Fall sets in, the number of pricings in SPACland may experience a similar movement, however, considering the already low level of IPOs seen this year, it may remain consistent.

Note: Based on the unit’s (or share’s) day-1 VWAP.