By Abigail W. Adams
Portland, Me., Jan. 13 – DocuSign Inc. priced an upsized $600 million of three-year convertible notes after the market close on Tuesday at par with a coupon of 0% and an initial conversion premium of 60%, according to a company news release.
Pricing came at the rich end of talk for a coupon of 0% to 0.5% and at the midpoint of talk for an initial conversion premium of 57.5% to 62.5%, according to a market source.
J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, Mizuho Securities USA Inc., BofA Securities Inc. and Citigroup Global Markets Inc. were joint bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $90 million.
The initial size of the offering was $500 million with a greenshoe of $75 million.
The notes are non-callable.
They will be settled in cash, shares or a combination of both at the company’s option.
In connection with the pricing of the notes, the company entered into capped call transactions with a cap price of $523.30, which represents a 100% premium over the last reported sales price of stock.
The company also plans to enter into privately negotiated transactions with holders of its 0.5% convertible notes due 2023 to repurchase $460 million of the principal amount of the notes for $460 million in cash and 4.7 million shares.
Net proceeds are expected to be $588.9 million or will be $677.3 million if the greenshoe is exercised in full.
Approximately $27.3 million of the proceeds will be used to cover the cost of the call spread, $460 million will be used to fund the repurchase of the 2023 notes with the remaining amount to be used for general corporate purposes.
DocuSign is a San Francisco-based electronic signature technology and digital transaction management services company.
| Issuer: | DocuSign Inc.
|
| Securities: | Convertible senior notes
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| Amount: | $600 million
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| Greenshoe: | $90 million
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| Maturity: | Jan. 15, 2024
|
| Bookrunners: | J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, Mizuho Securities USA Inc., BofA Securities Inc. and Citigroup Global Markets Inc.
|
| Coupon: | 0%
|
| Price: | Par
|
| Yield: | 0%
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| Conversion premium: | 60%
|
| Conversion price: | $420.24
|
| Conversion rate: | 2.3796
|
| Call options: | Non-callable
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| Pricing date: | Jan. 12
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| Settlement date: | Jan. 15
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| Distribution: | Rule 144A
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| Talk: | Coupon of 0% to 0.5% and initial conversion premium of 57.5% to 62.5%
|
| Stock symbol: | Nasdaq: DOCU
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| Stock price: | $262.65 at market close Jan. 13
|
| Market capitalization: | $49 billion
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