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Qihoo 360 greenshoe brings two-part convertibles deal to $1.04 billion
By Susanna Moon
Chicago, Aug. 14 – Qihoo 360 Technology Co. Ltd.’s underwriters fully exercised the $135 million over-allotment option on its convertible senior notes, bringing the total deal size to $1,035,000,000.
The joint bookrunners fully exercised the $67.5 million greenshoe on the 0.5% convertibles due 2020 and the $67.5 million greenshoe on the 1.75% convertibles due 2021, according to a 6-K filing with the Securities and Exchange Commission.
As previously reported, Qihoo priced $900 million of the convertibles in two equally divided tranches of six-year and seven-year paper on Aug. 1. Pricing was at the midpoint of talk except for the premium of the longer-dates notes, which was at the cheap end.
The bookrunners for the Rule 144A and Regulation S offering were Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC.
The six-year tranche for $517.5 million has a 0.5% coupon and a 37.5% initial conversion premium, which was the midpoint of talk for a 0.25% to 0.75% coupon and a 35% to 40% premium.
The seven-year tranche for $517.5 million has a 1.75% coupon and a 32.5% initial conversion premium, which was the midpoint of 1.5% to 2% coupon talk but the cheap end of 32.5% to 37.5% premium talk.
The notes have contingent conversion and net share settlement. They are non-callable, but holders of the 2020 notes can put the notes on Aug. 15, 2017 at par plus accrued interest, and holders of the 2021 notes can put the notes on Aug. 15, 2019 at par plus interest.
There is also takeover and dividend protection.
Proceeds are earmarked for general corporate purposes.
Beijing-based Qihoo provides PC and mobile internet security products in China.
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