Expedia greenshoe exercised, lifts 0% convertibles to $1 billion

By Taylor Fox

New York, Feb. 19 – Underwriters for Expedia Group, Inc.’s 0% convertible senior notes exercised their full $100 million greenshoe, increasing the total deal size to $1 billion, according to an 8-K filing with the Securities and Exchange Commission.

As previously reported, Expedia priced the five-year convertible notes (Baa3/BBB-/BBB-) after the market close on Tuesday at par with a coupon of 0% and an initial conversion premium of 72.5%.

Pricing came in line with initial talk for a fixed coupon of 0% and richer than revised talk for an initial conversion premium of 65% to 70%, according to a market source.

Initial price talk was for a fixed 0% coupon and an initial conversion premium of 57.5% to 62.5%; however, talk tightened during bookbuilding.

J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and BofA Securities Inc. were active bookrunners of the Rule 144A deal.

Mizuho Securities USA Inc., HSBC Securities (USA) Inc. and BNP Paribas Securities Corp. were also bookrunners.

The initial size of the offering was $825 million.

The notes are non-callable for three years and then subject to a 130% hurdle.

There is takeover and dividend protection.

The proceeds, together with the proceeds from its private placement of $1 billion unsecured 2.95% senior notes due 2031, will be used to finance the redemption of all of its issued and outstanding 7% senior notes due 2025, to finance the tender offer for a portion of its issued and outstanding 6.25% senior notes due 2025 and to pay fees and expenses, with any remaining net proceeds to be used to repay, prepay, redeem or repurchase the company’s indebtedness.

Expedia is a Bellevue, Wash.-based online travel company.

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