DocuSign greenshoe lifts 0.5% five-year convertibles to $575 million

By Sarah Lizee

Olympia, Wash., Sept. 18 – Underwriters for DocuSign Inc.’s 0.5% convertible notes due Sept. 15, 2023 fully exercised their $75 million greenshoe on Tuesday, bringing the total deal size to $575 million, according to an 8-K filing with the Securities and Exchange Commission.

The company priced an upsized $500 million of the convertibles prior to the market open on Friday at par with an initial conversion premium of 30%, as previously reported.

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%.

Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and Goldman Sachs & Co. are joint bookrunners for the Rule 144A deal.

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 convertibles, 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 note 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.

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