By Abigail W. Adams
Portland, Me., Sept. 14 – DocuSign Inc. priced an upsized $500 million of five-year convertible notes prior to the market open on Friday at par with a coupon of 0.5% and an initial conversion premium of 30%, according to a company news release.
Pricing came at the rich end of talk for a coupon of 0.5% to 1% and at the cheap end of talk for an initial conversion premium of 30% to 35%, according to a market source.
Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC are joint bookrunners for the Rule 144A deal, which carries a greenshoe of $75 million.
The initial size of the deal was $400 million with a greenshoe of $60 million.
The notes are non-callable until Sept. 20, 2021 and then subject to a 130% hurdle. The notes are putable upon a fundamental change.
In connection with the pricing, DocuSign will enter into capped call transactions with a cap price of $110, representing a 100% premium over the stock price in the concurrent offering.
Concurrently with the convertible notes, DocuSign priced an offering of 8,060,550 shares of common stock at $55.00 per share. The common stock offering carries a greenshoe of 1,209,082 shares.
Net proceeds from the convertible notes offering are expected to be $487.6 million, or $560.8 million if the greenshoe is exercised in full.
Proceeds will be used to cover the cost of the call spread and for general corporate purposes, which may include the acquisition of or investment in complementary technologies or businesses.
DocuSign is a San Francisco-based electronic signature technology and digital transaction management services company.
| Issuer: | DocuSign Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $500 million
|
| Greenshoe: | $75 million
|
| Maturity: | Sept. 15, 2023
|
| Bookrunners: | Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC
|
| Coupon: | 0.5%
|
| Price: | Par
|
| Yield: | 0.5%
|
| Conversion premium: | 30%
|
| Conversion price: | $71.50
|
| Conversion rate: | 13.986
|
| Call options: | Non-callable until Sept. 20, 2021 then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Concurrent offering | 8.06 million shares of common stock
|
| Pricing date: | Sept. 14
|
| Settlement date: | Sept. 18
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 0.5% to 1% and an initial conversion premium of 30% to 35%
|
| Stock symbol: | Nasdaq: DOCU
|
| Stock price: | $55 in concurrent offering
|
| Market capitalization: | $8.68 billion
|
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