Evolent Health greenshoe ups six-year convertibles to $402.5 million

By Mary-Katherine Stinson

Lexington, Ky., Dec. 11 – The initial purchasers for Evolent Health Inc.’s six-year convertible notes on Dec. 6 exercised in full their option to purchase an additional $52.5 million of the notes, bringing the total deal size to $402.5 million, according to an 8-K filing with the Securities and Exchange Commission.

As previously reported, the notes priced at par on Dec. 5 with a coupon of 3.5% and an initial conversion premium of 42.5%.

Pricing came at the midpoint of talk for a coupon of 3.25% to 3.75% and at the rich end of talk for an initial conversion premium of 37.5% to 42.5%, according to a market source.

Goldman Sachs & Co. LLC and Oppenheimer & Co. Inc. were bookrunners for the Rule 144A offering.

The notes are non-callable until Dec. 6, 2026 and then subject to a 130% hurdle.

There is takeover and dividend protection.

The proceeds of approximately $390.2 million plus available liquidity were used to prepay all outstanding borrowings under the company’s term loan due January 2029. The prepayment was comprised of $405 million of principal, $9.1 million in accrued interest and $10.1 million in prepayment premium. As of Dec. 8, Evolent had $37.5 million in borrowings outstanding under the company’s revolver.

Evolent Health is an Arlington, Va.-based company that partners with health care payers and providers to reduce the cost of care.

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