By Abigail W. Adams
Portland, Me., Aug. 14 – Akamai Technologies Inc. priced $1 billion in eight-year convertible notes after the market close on Tuesday at par with a coupon of 0.375% and an initial conversion premium of 30%, according to a company news release.
Price talk came at the cheap end of tightened talk for a coupon of 0% to 0.375% and an initial conversion premium of 30%, according to a market source.
Initial price talk was for a coupon of 0% to 0.5% and an initial conversion premium of 30% to 35%.
J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and BofA Securities Inc. are the bookrunners for the Rule 144A offering, which carries a greenshoe of $150 million.
The notes are non-callable. They are contingently convertible until May 1, 2027.
They have standard dividend and takeover protection.
The notes are convertible into cash, shares or a combination of both at the company’s option.
In connection with the pricing of the notes, Akamai will enter into convertible note hedge transactions.
Net proceeds are expected to be $986.9 million, or $1.135 billion if the greenshoe is exercised in full.
Approximately $110.5 million of the proceeds will be used to cover the cost of the call spread, $100 million will be used to purchase common stock in privately negotiated transactions at a price of $89.37 per share with the remaining amount to be used for working capital and for general corporate purposes, which may include acquisitions.
Akamai is a Cambridge, Mass.-based content delivery network and cloud service provider.
| Issuer: | Akamai Technologies Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $1 billion
|
| Greenshoe: | $150 million
|
| Maturity: | Sept. 1, 2027
|
| Bookrunners: | J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and BofA Securities Inc.
|
| Co-managers: | Barclays, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Mizuho Securities USA Inc., MUFG, SMBC Nikko Securities America Inc. and TD Securities (USA) LLC
|
| Coupon: | 0.375%
|
| Price: | Par
|
| Yield: | 0.375%
|
| Conversion premium: | 30%
|
| Conversion price: | $116.18
|
| Conversion rate: | 8.6073
|
| Call options: | Non-callable
|
| Pricing date: | Aug. 13
|
| Settlement date: | Aug. 16
|
| Distribution: | Rule 144A
|
| Talk: | Revised talk for coupon of 0% to 0.375% and initial conversion premium of 30%; initial talk coupon of 0% to 0.5% and initial conversion premium of 30% to 35%
|
| Stock symbol: | Nasdaq: AKAM
|
| Stock price: | $89.37 at market close Aug. 13
|
| Market capitalization: | $14.61 billion
|
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